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1		AN ACT concerning State government.
2		Be it enacted by the People of the State of Illinois,
3		represented in the General Assembly:
4		Section 1. Legislative intent. It is the intent of the
5		General Assembly in enacting this amendatory Act of the 102nd
6		General Assembly to make only nonsubstantive changes that
7		remove the dehumanizing term "alien" from all Illinois
8		statutory provisions. No change made by this amendatory Act of
9		the 102nd General Assembly shall be interpreted as to make any
10		substantive change to existing law, including, but not limited
11		to, eligibility for federal programs or benefits that are
12		available to a person who meets the definition of "alien"
13		under State or federal law.
14		Section 5. The Illinois Notary Public Act is amended by
15		changing Section 2-102 as follows:
16		(5 ILCS 312/2-102) (from Ch. 102, par. 202-102)
17		(Text of Section before amendment by P.A. 102-160)
18		Sec. 2-102. Application. Every applicant for appointment
19		and commission as a notary shall complete an application in a
20		format prescribed by the Secretary of State to be filed with
21		the Secretary of State, stating:
22		(a) the applicant's official name, as it appears on

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1		his or her current driver's license or state-issued
2		identification card;
3		(b) the county in which the applicant resides or, if
4		the applicant is a resident of a state bordering Illinois,
5		the county in Illinois in which that person's principal
6		place of work or principal place of business is located;
7		(c) the applicant's residence address, as it appears
8		on his or her current driver's license or state-issued
9		identification card;
10		(c-5) the applicant's business address if different
11		than the applicant's residence address, if performing
12		notarial acts constitutes any portion of the applicant's
13		job duties;
14		(d) that the applicant has resided in the State of
15		Illinois for 30 days preceding the application or that the
16		applicant who is a resident of a state bordering Illinois
17		has worked or maintained a business in Illinois for 30
18		days preceding the application;
19		(e) that the applicant is a citizen of the United
20		States or a noncitizen an alien lawfully admitted for
21		permanent residence in the United States;
22		(f) the applicant's date of birth;
23		(g) that the applicant is able to read and write the
24		English language;
25		(h) that the applicant has never been the holder of a
26		notary public appointment that was revoked or suspended

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1		during the past 10 years;
2		(i) that the applicant has not been convicted of a
3		felony;
4		(i-5) that the applicant's signature authorizes the
5		Office of the Secretary of State to conduct a verification
6		to confirm the information provided in the application,
7		including a criminal background check of the applicant, if
8		necessary; and
9		(j) any other information the Secretary of State deems
10		necessary.
11		(Source: P.A. 99-112, eff. 1-1-16; 100-809, eff. 1-1-19.)
12		(Text of Section after amendment by P.A. 102-160)
13		Sec. 2-102. Application.
14		(a) Application for notary public commission. Every
15		applicant for appointment and commission as a notary shall
16		complete an application in a format prescribed by the
17		Secretary of State to be filed with the Secretary of State,
18		stating:
19		(1) the applicant's official name, as it appears on
20		his or her current driver's license or state-issued
21		identification card;
22		(2) the county in which the applicant resides or, if
23		the applicant is a resident of a state bordering Illinois,
24		the county in Illinois in which that person's principal
25		place of work or principal place of business is located;

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1		(3) the applicant's residence address, as it appears
2		on his or her current driver's license or state-issued
3		identification card;
4		(4) the applicant's e-mail address;
5		(5) the applicant's business address if different than
6		the applicant's residence address, if performing notarial
7		acts constitutes any portion of the applicant's job
8		duties;
9		(6) that the applicant has resided in the State of
10		Illinois for 30 days preceding the application or that the
11		applicant who is a resident of a state bordering Illinois
12		has worked or maintained a business in Illinois for 30
13		days preceding the application;
14		(7) that the applicant is a citizen of the United
15		States or lawfully admitted for permanent residence in the
16		United States;
17		(8) the applicant's date of birth;
18		(9) that the applicant is proficient in the the
19		English language;
20		(10) that the applicant has not had a prior
21		application or commission revoked due to a finding or
22		decision by the Secretary of State;
23		(11) that the applicant has not been convicted of a
24		felony;
25		(12) that the applicant's signature authorizes the
26		Office of the Secretary of State to conduct a verification

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1		to confirm the information provided in the application,
2		including a criminal background check of the applicant, if
3		necessary;
4		(13) that the applicant has provided satisfactory
5		proof to the Secretary of State that the applicant has
6		successfully completed any required course of study on
7		notarization; and
8		(14) any other information the Secretary of State
9		deems necessary.
10		(b) Any notary appointed under subsection (a) shall have
11		the authority to conduct remote notarizations.
12		(c) Application for electronic notary public commission.
13		An application for an electronic notary public commission must
14		be filed with the Secretary of State in a manner prescribed by
15		the Secretary of State. Every applicant for appointment and
16		commission as an electronic notary public shall complete an
17		application to be filed with the Secretary of State, stating:
18		(1) all information required to be included in an
19		application for appointment as an electronic notary
20		public, as provided under subsection (a);
21		(2) that the applicant is commissioned as a notary
22		public under this Act;
23		(3) the applicant's email address;
24		(4) that the applicant has provided satisfactory proof
25		to the Secretary of State that the applicant has
26		successfully completed any required course of study on

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1		electronic notarization and passed a qualifying
2		examination;
3		(5) a description of the technology or device that the
4		applicant intends to use to create his or her electronic
5		signature in performing electronic notarial acts;
6		(6) the electronic signature of the applicant; and
7		(7) any other information the Secretary of State deems
8		necessary.
9		(d) Electronic notarial acts. Before an electronic notary
10		public performs an electronic notarial act using audio-video
11		communication, he or she must be granted an electronic notary
12		public commission by the Secretary of State under this
13		Section, and identify the technology that the electronic
14		notary public intends to use, which must be approved by the
15		Secretary of State.
16		(e) Approval of commission. Upon the applicant's
17		fulfillment of the requirements for a notarial commission or
18		an electronic notary public commission, the Secretary of State
19		shall approve the commission and issue to the applicant a
20		unique commission number.
21		(f) Rejection of application. The Secretary of State may
22		reject an application for a notarial commission or an
23		electronic notary public commission if the applicant fails to
24		comply with any Section of this Act.
25		(Source: P.A. 102-160 (See Section 99 of P.A. 102-160 for
26		effective date of P.A. 102-160).)

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1		Section 10. The Illinois TRUST Act is amended by changing
2		Section 10 as follows:
3		(5 ILCS 805/10)
4		Sec. 10. Definitions. In this Act:
5		"Citizenship or immigration status" means all matters
6		regarding citizenship of the United States or any other
7		country or the authority to reside in or otherwise be present
8		in the United States.
9		"Civil immigration warrant" means any document that is not
10		approved or ordered by a judge that can form the basis for an
11		individual's arrest or detention for a civil immigration
12		enforcement purpose. "Civil immigration warrant" includes Form
13		I-200 "Warrant for the Arrest of Alien", Form I-203 "Order to
14		Detain or Release Alien", Form I-205 "Warrant of
15		Removal/Deportation", Form I-286 "Notice of Custody
16		Determination", any predecessor or successor form, and all
17		warrants, hits, or requests contained in the "Immigration
18		Violator File" of the FBI's National Crime Information Center
19		(NCIC) database. "Civil immigration warrant" does not include
20		any criminal warrant.
21		"Contact information" means home address, work address,
22		telephone number, electronic mail address, social media
23		information, or any other personal identifying information
24		that could be used as a means to contact an individual.

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1		"Immigration agent" means an agent of federal Immigration
2		and Customs Enforcement, federal Customs and Border
3		Protection, or any similar or successor agency.
4		"Immigration detainer" means a request to a State or local
5		law enforcement agency to provide notice of release or
6		maintain custody of an individual based on an alleged
7		violation of a civil immigration law, including detainers
8		issued under Sections 1226 or 1357 of Title 8 of the United
9		States Code or 287.7 or 236.1 of Title 8 of the Code of Federal
10		Regulations. "Immigration detainer" includes Form I-247A
11		"Immigration Detainer – Notice of Action" and any predecessor
12		or successor form.
13		"Law enforcement agency" means an agency of the State or
14		of a unit of local government charged with enforcement of
15		State, county, or municipal laws or with managing custody of
16		detained persons in the State.
17		"Law enforcement official" means any individual with the
18		power to arrest or detain individuals, including law
19		enforcement officers, corrections officer, and others employed
20		or designated by a law enforcement agency. "Law enforcement
21		official" includes any probation officer.
22		(Source: P.A. 102-234, eff. 8-2-21.)
23		Section 15. The Department of Commerce and Economic
24		Opportunity Law of the Civil Administrative Code of Illinois
25		is amended by changing Section 605-800 as follows:

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1		(20 ILCS 605/605-800) (was 20 ILCS 605/46.19a in part)
2		Sec. 605-800. Training grants for skills in critical
3		demand.
4		(a) Grants to provide training in fields affected by
5		critical demands for certain skills may be made as provided in
6		this Section.
7		(b) The Director may make grants to eligible employers or
8		to other eligible entities on behalf of employers as
9		authorized in subsection (c) to provide training for employees
10		in fields for which there are critical demands for certain
11		skills. No participating employee may be an unauthorized
12		noncitizen (a person that is not lawfully admitted for
13		permanent residence) alien, as defined in 8 U.S.C. 1324a.
14		(c) The Director may accept applications for training
15		grant funds and grant requests from: (i) entities sponsoring
16		multi-company eligible employee training projects as defined
17		in subsection (d), including business associations, strategic
18		business partnerships, institutions of secondary or higher
19		education, large manufacturers for supplier network companies,
20		federal Job Training Partnership Act administrative entities
21		or grant recipients, and labor organizations when those
22		projects will address common training needs identified by
23		participating companies; and (ii) individual employers that
24		are undertaking eligible employee training projects as defined
25		in subsection (d), including intermediaries and training

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1		agents.
2		(d) The Director may make grants to eligible applicants as
3		defined in subsection (c) for employee training projects that
4		include, but need not be limited to, one or more of the
5		following:
6		(1) Training programs in response to new or changing
7		technology being introduced in the workplace.
8		(2) Job-linked training that offers special skills for
9		career advancement or that is preparatory for, and leads
10		directly to, jobs with definite career potential and
11		long-term job security.
12		(3) Training necessary to implement total quality
13		management or improvement or both management and
14		improvement systems within the workplace.
15		(4) Training related to new machinery or equipment.
16		(5) Training of employees of companies that are
17		expanding into new markets or expanding exports from
18		Illinois.
19		(6) Basic, remedial, or both basic and remedial
20		training of employees as a prerequisite for other
21		vocational or technical skills training or as a condition
22		for sustained employment.
23		(7) Self-employment training of the unemployed and
24		underemployed with comprehensive, competency-based
25		instructional programs and services, entrepreneurial
26		education and training initiatives for youth and adult

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1		learners in cooperation with the Illinois Institute for
2		Entrepreneurial Education, training and education,
3		conferences, workshops, and best practice information for
4		local program operators of entrepreneurial education and
5		self-employment training programs.
6		(8) Other training activities or projects, or both
7		training activities and projects, related to the support,
8		development, or evaluation of job training programs,
9		activities, and delivery systems, including training needs
10		assessment and design.
11		(e) Grants shall be made on the terms and conditions that
12		the Department shall determine. No grant made under subsection
13		(d), however, shall exceed 50% of the direct costs of all
14		approved training programs provided by the employer or the
15		employer's training agent or other entity as defined in
16		subsection (c). Under this Section, allowable costs include,
17		but are not limited to:
18		(1) Administrative costs of tracking, documenting,
19		reporting, and processing training funds or project costs.
20		(2) Curriculum development.
21		(3) Wages and fringe benefits of employees.
22		(4) Training materials, including scrap product costs.
23		(5) Trainee travel expenses.
24		(6) Instructor costs, including wages, fringe
25		benefits, tuition, and travel expenses.
26		(7) Rent, purchase, or lease of training equipment.

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1		(8) Other usual and customary training costs.
2		(f) The Department may conduct on-site grant monitoring
3		visits to verify trainee employment dates and wages and to
4		ensure that the grantee's financial management system is
5		structured to provide for accurate, current, and complete
6		disclosure of the financial results of the grant program in
7		accordance with all provisions, terms, and conditions
8		contained in the grant contract. Each applicant must, on
9		request by the Department, provide to the Department a
10		notarized certification signed and dated by a duly authorized
11		representative of the applicant, or that representative's
12		authorized designee, certifying that all participating
13		employees are employed at an Illinois facility and, for each
14		participating employee, stating the employee's name and
15		providing either (i) the employee's social security number or
16		(ii) a statement that the applicant has adequate written
17		verification that the employee is employed at an Illinois
18		facility. The Department may audit the accuracy of
19		submissions. Applicants sponsoring multi-company training
20		grant programs shall obtain information meeting the
21		requirement of this subsection from each participating company
22		and provide it to the Department upon request.
23		(g) The Director may establish and collect a schedule of
24		charges from subgrantee entities and other system users under
25		federal job-training programs for participating in and
26		utilizing the Department's automated job-training program

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1		information systems if the systems and the necessary
2		participation and utilization are requirements of the federal
3		job-training programs. All monies collected pursuant to this
4		subsection shall be deposited into the Federal Workforce
5		Training Fund and may be used, subject to appropriation by the
6		General Assembly, only for the purpose of financing the
7		maintenance and operation of the automated federal
8		job-training information systems.
9		(Source: P.A. 99-933, eff. 1-27-17.)
10		Section 20. The Illinois Guaranteed Job Opportunity Act is
11		amended by changing Section 25 as follows:
12		(20 ILCS 1510/25)
13		Sec. 25. Program eligibility.
14		(a) General Rule. An individual is eligible to participate
15		in the job projects assisted under this Act if the individual:
16		(1) is at least 16 years of age;
17		(2) has resided in the eligible area for at least 30
18		days;
19		(3) has been unemployed for 35 days prior to the
20		determination of employment for job projects assisted
21		under this Act;
22		(4) is a citizen of the United States, is a national of
23		the United States, is a lawfully admitted permanent
24		resident noncitizen alien, is a lawfully admitted refugee

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1		or parolee, or is otherwise authorized by the United
2		States Attorney General to work in the United States; and
3		(5) is a recipient of assistance under Article IV of
4		the Illinois Public Aid Code.
5		(b) Limitations.
6		(1) (Blank).
7		(2) (Blank).
8		(3) No individual participating in the job opportunity
9		project assisted under this Act may work in any
10		compensated job other than the job assisted under this Act
11		for more than 20 hours per week.
12		(4) Individuals participating under this Act shall
13		seek employment during the period of employment assisted
14		under this Act.
15		(5) Any individual eligible for retirement benefits
16		under the Social Security Act, under any retirement system
17		for Federal Government employees, under the railroad
18		retirement system, under the military retirement system,
19		under a State or local government pension plan or
20		retirement system, or any private pension program is not
21		eligible to receive a job under a job project assisted
22		under this Act.
23		(Source: P.A. 93-46, eff. 7-1-03.)
24		Section 25. The Illinois Income Tax Act is amended by
25		changing Section 1501 as follows:

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1		(35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
2		Sec. 1501. Definitions.
3		(a) In general. When used in this Act, where not otherwise
4		distinctly expressed or manifestly incompatible with the
5		intent thereof:
6		(1) Business income. The term "business income" means
7		all income that may be treated as apportionable business
8		income under the Constitution of the United States.
9		Business income is net of the deductions allocable
10		thereto. Such term does not include compensation or the
11		deductions allocable thereto. For each taxable year
12		beginning on or after January 1, 2003, a taxpayer may
13		elect to treat all income other than compensation as
14		business income. This election shall be made in accordance
15		with rules adopted by the Department and, once made, shall
16		be irrevocable.
17		(1.5) Captive real estate investment trust:
18		(A) The term "captive real estate investment
19		trust" means a corporation, trust, or association:
20		(i) that is considered a real estate
21		investment trust for the taxable year under
22		Section 856 of the Internal Revenue Code;
23		(ii) the certificates of beneficial interest
24		or shares of which are not regularly traded on an
25		established securities market; and

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1		(iii) of which more than 50% of the voting
2		power or value of the beneficial interest or
3		shares, at any time during the last half of the
4		taxable year, is owned or controlled, directly,
5		indirectly, or constructively, by a single
6		corporation.
7		(B) The term "captive real estate investment
8		trust" does not include:
9		(i) a real estate investment trust of which
10		more than 50% of the voting power or value of the
11		beneficial interest or shares is owned or
12		controlled, directly, indirectly, or
13		constructively, by:
14		(a) a real estate investment trust, other
15		than a captive real estate investment trust;
16		(b) a person who is exempt from taxation
17		under Section 501 of the Internal Revenue
18		Code, and who is not required to treat income
19		received from the real estate investment trust
20		as unrelated business taxable income under
21		Section 512 of the Internal Revenue Code;
22		(c) a listed Australian property trust, if
23		no more than 50% of the voting power or value
24		of the beneficial interest or shares of that
25		trust, at any time during the last half of the
26		taxable year, is owned or controlled, directly

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1		or indirectly, by a single person;
2		(d) an entity organized as a trust,
3		provided a listed Australian property trust
4		described in subparagraph (c) owns or
5		controls, directly or indirectly, or
6		constructively, 75% or more of the voting
7		power or value of the beneficial interests or
8		shares of such entity; or
9		(e) an entity that is organized outside of
10		the laws of the United States and that
11		satisfies all of the following criteria:
12		(1) at least 75% of the entity's total
13		asset value at the close of its taxable
14		year is represented by real estate assets
15		(as defined in Section 856(c)(5)(B) of the
16		Internal Revenue Code, thereby including
17		shares or certificates of beneficial
18		interest in any real estate investment
19		trust), cash and cash equivalents, and
20		U.S. Government securities;
21		(2) the entity is not subject to tax
22		on amounts that are distributed to its
23		beneficial owners or is exempt from
24		entity-level taxation;
25		(3) the entity distributes at least
26		85% of its taxable income (as computed in

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1		the jurisdiction in which it is organized)
2		to the holders of its shares or
3		certificates of beneficial interest on an
4		annual basis;
5		(4) either (i) the shares or
6		beneficial interests of the entity are
7		regularly traded on an established
8		securities market or (ii) not more than
9		10% of the voting power or value in the
10		entity is held, directly, indirectly, or
11		constructively, by a single entity or
12		individual; and
13		(5) the entity is organized in a
14		country that has entered into a tax treaty
15		with the United States; or
16		(ii) during its first taxable year for which
17		it elects to be treated as a real estate
18		investment trust under Section 856(c)(1) of the
19		Internal Revenue Code, a real estate investment
20		trust the certificates of beneficial interest or
21		shares of which are not regularly traded on an
22		established securities market, but only if the
23		certificates of beneficial interest or shares of
24		the real estate investment trust are regularly
25		traded on an established securities market prior
26		to the earlier of the due date (including

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1		extensions) for filing its return under this Act
2		for that first taxable year or the date it
3		actually files that return.
4		(C) For the purposes of this subsection (1.5), the
5		constructive ownership rules prescribed under Section
6		318(a) of the Internal Revenue Code, as modified by
7		Section 856(d)(5) of the Internal Revenue Code, apply
8		in determining the ownership of stock, assets, or net
9		profits of any person.
10		(D) For the purposes of this item (1.5), for
11		taxable years ending on or after August 16, 2007, the
12		voting power or value of the beneficial interest or
13		shares of a real estate investment trust does not
14		include any voting power or value of beneficial
15		interest or shares in a real estate investment trust
16		held directly or indirectly in a segregated asset
17		account by a life insurance company (as described in
18		Section 817 of the Internal Revenue Code) to the
19		extent such voting power or value is for the benefit of
20		entities or persons who are either immune from
21		taxation or exempt from taxation under subtitle A of
22		the Internal Revenue Code.
23		(2) Commercial domicile. The term "commercial
24		domicile" means the principal place from which the trade
25		or business of the taxpayer is directed or managed.
26		(3) Compensation. The term "compensation" means wages,

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1		salaries, commissions and any other form of remuneration
2		paid to employees for personal services.
3		(4) Corporation. The term "corporation" includes
4		associations, joint-stock companies, insurance companies
5		and cooperatives. Any entity, including a limited
6		liability company formed under the Illinois Limited
7		Liability Company Act, shall be treated as a corporation
8		if it is so classified for federal income tax purposes.
9		(5) Department. The term "Department" means the
10		Department of Revenue of this State.
11		(6) Director. The term "Director" means the Director
12		of Revenue of this State.
13		(7) Fiduciary. The term "fiduciary" means a guardian,
14		trustee, executor, administrator, receiver, or any person
15		acting in any fiduciary capacity for any person.
16		(8) Financial organization.
17		(A) The term "financial organization" means any
18		bank, bank holding company, trust company, savings
19		bank, industrial bank, land bank, safe deposit
20		company, private banker, savings and loan association,
21		building and loan association, credit union, currency
22		exchange, cooperative bank, small loan company, sales
23		finance company, investment company, or any person
24		which is owned by a bank or bank holding company. For
25		the purpose of this Section a "person" will include
26		only those persons which a bank holding company may

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1		acquire and hold an interest in, directly or
2		indirectly, under the provisions of the Bank Holding
3		Company Act of 1956 (12 U.S.C. 1841, et seq.), except
4		where interests in any person must be disposed of
5		within certain required time limits under the Bank
6		Holding Company Act of 1956.
7		(B) For purposes of subparagraph (A) of this
8		paragraph, the term "bank" includes (i) any entity
9		that is regulated by the Comptroller of the Currency
10		under the National Bank Act, or by the Federal Reserve
11		Board, or by the Federal Deposit Insurance Corporation
12		and (ii) any federally or State chartered bank
13		operating as a credit card bank.
14		(C) For purposes of subparagraph (A) of this
15		paragraph, the term "sales finance company" has the
16		meaning provided in the following item (i) or (ii):
17		(i) A person primarily engaged in one or more
18		of the following businesses: the business of
19		purchasing customer receivables, the business of
20		making loans upon the security of customer
21		receivables, the business of making loans for the
22		express purpose of funding purchases of tangible
23		personal property or services by the borrower, or
24		the business of finance leasing. For purposes of
25		this item (i), "customer receivable" means:
26		(a) a retail installment contract or

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1		retail charge agreement within the meaning of
2		the Sales Finance Agency Act, the Retail
3		Installment Sales Act, or the Motor Vehicle
4		Retail Installment Sales Act;
5		(b) an installment, charge, credit, or
6		similar contract or agreement arising from the
7		sale of tangible personal property or services
8		in a transaction involving a deferred payment
9		price payable in one or more installments
10		subsequent to the sale; or
11		(c) the outstanding balance of a contract
12		or agreement described in provisions (a) or
13		(b) of this item (i).
14		A customer receivable need not provide for
15		payment of interest on deferred payments. A sales
16		finance company may purchase a customer receivable
17		from, or make a loan secured by a customer
18		receivable to, the seller in the original
19		transaction or to a person who purchased the
20		customer receivable directly or indirectly from
21		that seller.
22		(ii) A corporation meeting each of the
23		following criteria:
24		(a) the corporation must be a member of an
25		"affiliated group" within the meaning of
26		Section 1504(a) of the Internal Revenue Code,

SB3865 Engrossed - 23 - LRB102 24242 RJF 33473 b
1		determined without regard to Section 1504(b)
2		of the Internal Revenue Code;
3		(b) more than 50% of the gross income of
4		the corporation for the taxable year must be
5		interest income derived from qualifying loans.
6		A "qualifying loan" is a loan made to a member
7		of the corporation's affiliated group that
8		originates customer receivables (within the
9		meaning of item (i)) or to whom customer
10		receivables originated by a member of the
11		affiliated group have been transferred, to the
12		extent the average outstanding balance of
13		loans from that corporation to members of its
14		affiliated group during the taxable year do
15		not exceed the limitation amount for that
16		corporation. The "limitation amount" for a
17		corporation is the average outstanding
18		balances during the taxable year of customer
19		receivables (within the meaning of item (i))
20		originated by all members of the affiliated
21		group. If the average outstanding balances of
22		the loans made by a corporation to members of
23		its affiliated group exceed the limitation
24		amount, the interest income of that
25		corporation from qualifying loans shall be
26		equal to its interest income from loans to

SB3865 Engrossed - 24 - LRB102 24242 RJF 33473 b
1		members of its affiliated groups times a
2		fraction equal to the limitation amount
3		divided by the average outstanding balances of
4		the loans made by that corporation to members
5		of its affiliated group;
6		(c) the total of all shareholder's equity
7		(including, without limitation, paid-in
8		capital on common and preferred stock and
9		retained earnings) of the corporation plus the
10		total of all of its loans, advances, and other
11		obligations payable or owed to members of its
12		affiliated group may not exceed 20% of the
13		total assets of the corporation at any time
14		during the tax year; and
15		(d) more than 50% of all interest-bearing
16		obligations of the affiliated group payable to
17		persons outside the group determined in
18		accordance with generally accepted accounting
19		principles must be obligations of the
20		corporation.
21		This amendatory Act of the 91st General Assembly
22		is declaratory of existing law.
23		(D) Subparagraphs (B) and (C) of this paragraph
24		are declaratory of existing law and apply
25		retroactively, for all tax years beginning on or
26		before December 31, 1996, to all original returns, to

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1		all amended returns filed no later than 30 days after
2		the effective date of this amendatory Act of 1996, and
3		to all notices issued on or before the effective date
4		of this amendatory Act of 1996 under subsection (a) of
5		Section 903, subsection (a) of Section 904, subsection
6		(e) of Section 909, or Section 912. A taxpayer that is
7		a "financial organization" that engages in any
8		transaction with an affiliate shall be a "financial
9		organization" for all purposes of this Act.
10		(E) For all tax years beginning on or before
11		December 31, 1996, a taxpayer that falls within the
12		definition of a "financial organization" under
13		subparagraphs (B) or (C) of this paragraph, but who
14		does not fall within the definition of a "financial
15		organization" under the Proposed Regulations issued by
16		the Department of Revenue on July 19, 1996, may
17		irrevocably elect to apply the Proposed Regulations
18		for all of those years as though the Proposed
19		Regulations had been lawfully promulgated, adopted,
20		and in effect for all of those years. For purposes of
21		applying subparagraphs (B) or (C) of this paragraph to
22		all of those years, the election allowed by this
23		subparagraph applies only to the taxpayer making the
24		election and to those members of the taxpayer's
25		unitary business group who are ordinarily required to
26		apportion business income under the same subsection of

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1		Section 304 of this Act as the taxpayer making the
2		election. No election allowed by this subparagraph
3		shall be made under a claim filed under subsection (d)
4		of Section 909 more than 30 days after the effective
5		date of this amendatory Act of 1996.
6		(F) Finance Leases. For purposes of this
7		subsection, a finance lease shall be treated as a loan
8		or other extension of credit, rather than as a lease,
9		regardless of how the transaction is characterized for
10		any other purpose, including the purposes of any
11		regulatory agency to which the lessor is subject. A
12		finance lease is any transaction in the form of a lease
13		in which the lessee is treated as the owner of the
14		leased asset entitled to any deduction for
15		depreciation allowed under Section 167 of the Internal
16		Revenue Code.
17		(9) Fiscal year. The term "fiscal year" means an
18		accounting period of 12 months ending on the last day of
19		any month other than December.
20		(9.5) Fixed place of business. The term "fixed place
21		of business" has the same meaning as that term is given in
22		Section 864 of the Internal Revenue Code and the related
23		Treasury regulations.
24		(10) Includes and including. The terms "includes" and
25		"including" when used in a definition contained in this
26		Act shall not be deemed to exclude other things otherwise

SB3865 Engrossed - 27 - LRB102 24242 RJF 33473 b
1		within the meaning of the term defined.
2		(11) Internal Revenue Code. The term "Internal Revenue
3		Code" means the United States Internal Revenue Code of
4		1954 or any successor law or laws relating to federal
5		income taxes in effect for the taxable year.
6		(11.5) Investment partnership.
7		(A) The term "investment partnership" means any
8		entity that is treated as a partnership for federal
9		income tax purposes that meets the following
10		requirements:
11		(i) no less than 90% of the partnership's cost
12		of its total assets consists of qualifying
13		investment securities, deposits at banks or other
14		financial institutions, and office space and
15		equipment reasonably necessary to carry on its
16		activities as an investment partnership;
17		(ii) no less than 90% of its gross income
18		consists of interest, dividends, and gains from
19		the sale or exchange of qualifying investment
20		securities; and
21		(iii) the partnership is not a dealer in
22		qualifying investment securities.
23		(B) For purposes of this paragraph (11.5), the
24		term "qualifying investment securities" includes all
25		of the following:
26		(i) common stock, including preferred or debt

SB3865 Engrossed - 28 - LRB102 24242 RJF 33473 b
1		securities convertible into common stock, and
2		preferred stock;
3		(ii) bonds, debentures, and other debt
4		securities;
5		(iii) foreign and domestic currency deposits
6		secured by federal, state, or local governmental
7		agencies;
8		(iv) mortgage or asset-backed securities
9		secured by federal, state, or local governmental
10		agencies;
11		(v) repurchase agreements and loan
12		participations;
13		(vi) foreign currency exchange contracts and
14		forward and futures contracts on foreign
15		currencies;
16		(vii) stock and bond index securities and
17		futures contracts and other similar financial
18		securities and futures contracts on those
19		securities;
20		(viii) options for the purchase or sale of any
21		of the securities, currencies, contracts, or
22		financial instruments described in items (i) to
23		(vii), inclusive;
24		(ix) regulated futures contracts;
25		(x) commodities (not described in Section
26		1221(a)(1) of the Internal Revenue Code) or

SB3865 Engrossed - 29 - LRB102 24242 RJF 33473 b
1		futures, forwards, and options with respect to
2		such commodities, provided, however, that any item
3		of a physical commodity to which title is actually
4		acquired in the partnership's capacity as a dealer
5		in such commodity shall not be a qualifying
6		investment security;
7		(xi) derivatives; and
8		(xii) a partnership interest in another
9		partnership that is an investment partnership.
10		(12) Mathematical error. The term "mathematical error"
11		includes the following types of errors, omissions, or
12		defects in a return filed by a taxpayer which prevents
13		acceptance of the return as filed for processing:
14		(A) arithmetic errors or incorrect computations on
15		the return or supporting schedules;
16		(B) entries on the wrong lines;
17		(C) omission of required supporting forms or
18		schedules or the omission of the information in whole
19		or in part called for thereon; and
20		(D) an attempt to claim, exclude, deduct, or
21		improperly report, in a manner directly contrary to
22		the provisions of the Act and regulations thereunder
23		any item of income, exemption, deduction, or credit.
24		(13) Nonbusiness income. The term "nonbusiness income"
25		means all income other than business income or
26		compensation.

SB3865 Engrossed - 30 - LRB102 24242 RJF 33473 b
1		(14) Nonresident. The term "nonresident" means a
2		person who is not a resident.
3		(15) Paid, incurred and accrued. The terms "paid",
4		"incurred" and "accrued" shall be construed according to
5		the method of accounting upon the basis of which the
6		person's base income is computed under this Act.
7		(16) Partnership and partner. The term "partnership"
8		includes a syndicate, group, pool, joint venture or other
9		unincorporated organization, through or by means of which
10		any business, financial operation, or venture is carried
11		on, and which is not, within the meaning of this Act, a
12		trust or estate or a corporation; and the term "partner"
13		includes a member in such syndicate, group, pool, joint
14		venture or organization.
15		The term "partnership" includes any entity, including
16		a limited liability company formed under the Illinois
17		Limited Liability Company Act, classified as a partnership
18		for federal income tax purposes.
19		The term "partnership" does not include a syndicate,
20		group, pool, joint venture, or other unincorporated
21		organization established for the sole purpose of playing
22		the Illinois State Lottery.
23		(17) Part-year resident. The term "part-year resident"
24		means an individual who became a resident during the
25		taxable year or ceased to be a resident during the taxable
26		year. Under Section 1501(a)(20)(A)(i) residence commences

SB3865 Engrossed - 31 - LRB102 24242 RJF 33473 b
1		with presence in this State for other than a temporary or
2		transitory purpose and ceases with absence from this State
3		for other than a temporary or transitory purpose. Under
4		Section 1501(a)(20)(A)(ii) residence commences with the
5		establishment of domicile in this State and ceases with
6		the establishment of domicile in another State.
7		(18) Person. The term "person" shall be construed to
8		mean and include an individual, a trust, estate,
9		partnership, association, firm, company, corporation,
10		limited liability company, or fiduciary. For purposes of
11		Section 1301 and 1302 of this Act, a "person" means (i) an
12		individual, (ii) a corporation, (iii) an officer, agent,
13		or employee of a corporation, (iv) a member, agent or
14		employee of a partnership, or (v) a member, manager,
15		employee, officer, director, or agent of a limited
16		liability company who in such capacity commits an offense
17		specified in Section 1301 and 1302.
18		(18A) Records. The term "records" includes all data
19		maintained by the taxpayer, whether on paper, microfilm,
20		microfiche, or any type of machine-sensible data
21		compilation.
22		(19) Regulations. The term "regulations" includes
23		rules promulgated and forms prescribed by the Department.
24		(20) Resident. The term "resident" means:
25		(A) an individual (i) who is in this State for
26		other than a temporary or transitory purpose during

SB3865 Engrossed - 32 - LRB102 24242 RJF 33473 b
1		the taxable year; or (ii) who is domiciled in this
2		State but is absent from the State for a temporary or
3		transitory purpose during the taxable year;
4		(B) The estate of a decedent who at his or her
5		death was domiciled in this State;
6		(C) A trust created by a will of a decedent who at
7		his death was domiciled in this State; and
8		(D) An irrevocable trust, the grantor of which was
9		domiciled in this State at the time such trust became
10		irrevocable. For purpose of this subparagraph, a trust
11		shall be considered irrevocable to the extent that the
12		grantor is not treated as the owner thereof under
13		Sections 671 through 678 of the Internal Revenue Code.
14		(21) Sales. The term "sales" means all gross receipts
15		of the taxpayer not allocated under Sections 301, 302 and
16		303.
17		(22) State. The term "state" when applied to a
18		jurisdiction other than this State means any state of the
19		United States, the District of Columbia, the Commonwealth
20		of Puerto Rico, any Territory or Possession of the United
21		States, and any foreign country, or any political
22		subdivision of any of the foregoing. For purposes of the
23		foreign tax credit under Section 601, the term "state"
24		means any state of the United States, the District of
25		Columbia, the Commonwealth of Puerto Rico, and any
26		territory or possession of the United States, or any

SB3865 Engrossed - 33 - LRB102 24242 RJF 33473 b
1		political subdivision of any of the foregoing, effective
2		for tax years ending on or after December 31, 1989.
3		(23) Taxable year. The term "taxable year" means the
4		calendar year, or the fiscal year ending during such
5		calendar year, upon the basis of which the base income is
6		computed under this Act. "Taxable year" means, in the case
7		of a return made for a fractional part of a year under the
8		provisions of this Act, the period for which such return
9		is made.
10		(24) Taxpayer. The term "taxpayer" means any person
11		subject to the tax imposed by this Act.
12		(25) International banking facility. The term
13		international banking facility shall have the same meaning
14		as is set forth in the Illinois Banking Act or as is set
15		forth in the laws of the United States or regulations of
16		the Board of Governors of the Federal Reserve System.
17		(26) Income Tax Return Preparer.
18		(A) The term "income tax return preparer" means
19		any person who prepares for compensation, or who
20		employs one or more persons to prepare for
21		compensation, any return of tax imposed by this Act or
22		any claim for refund of tax imposed by this Act. The
23		preparation of a substantial portion of a return or
24		claim for refund shall be treated as the preparation
25		of that return or claim for refund.
26		(B) A person is not an income tax return preparer

SB3865 Engrossed - 34 - LRB102 24242 RJF 33473 b
1		if all he or she does is
2		(i) furnish typing, reproducing, or other
3		mechanical assistance;
4		(ii) prepare returns or claims for refunds for
5		the employer by whom he or she is regularly and
6		continuously employed;
7		(iii) prepare as a fiduciary returns or claims
8		for refunds for any person; or
9		(iv) prepare claims for refunds for a taxpayer
10		in response to any notice of deficiency issued to
11		that taxpayer or in response to any waiver of
12		restriction after the commencement of an audit of
13		that taxpayer or of another taxpayer if a
14		determination in the audit of the other taxpayer
15		directly or indirectly affects the tax liability
16		of the taxpayer whose claims he or she is
17		preparing.
18		(27) Unitary business group.
19		(A) The term "unitary business group" means a
20		group of persons related through common ownership
21		whose business activities are integrated with,
22		dependent upon and contribute to each other. The group
23		will not include those members whose business activity
24		outside the United States is 80% or more of any such
25		member's total business activity; for purposes of this
26		paragraph and clause (a)(3)(B)(ii) of Section 304,

SB3865 Engrossed - 35 - LRB102 24242 RJF 33473 b
1		business activity within the United States shall be
2		measured by means of the factors ordinarily applicable
3		under subsections (a), (b), (c), (d), or (h) of
4		Section 304 except that, in the case of members
5		ordinarily required to apportion business income by
6		means of the 3 factor formula of property, payroll and
7		sales specified in subsection (a) of Section 304,
8		including the formula as weighted in subsection (h) of
9		Section 304, such members shall not use the sales
10		factor in the computation and the results of the
11		property and payroll factor computations of subsection
12		(a) of Section 304 shall be divided by 2 (by one if
13		either the property or payroll factor has a
14		denominator of zero). The computation required by the
15		preceding sentence shall, in each case, involve the
16		division of the member's property, payroll, or revenue
17		miles in the United States, insurance premiums on
18		property or risk in the United States, or financial
19		organization business income from sources within the
20		United States, as the case may be, by the respective
21		worldwide figures for such items. Common ownership in
22		the case of corporations is the direct or indirect
23		control or ownership of more than 50% of the
24		outstanding voting stock of the persons carrying on
25		unitary business activity. Unitary business activity
26		can ordinarily be illustrated where the activities of

SB3865 Engrossed - 36 - LRB102 24242 RJF 33473 b
1		the members are: (1) in the same general line (such as
2		manufacturing, wholesaling, retailing of tangible
3		personal property, insurance, transportation or
4		finance); or (2) are steps in a vertically structured
5		enterprise or process (such as the steps involved in
6		the production of natural resources, which might
7		include exploration, mining, refining, and marketing);
8		and, in either instance, the members are functionally
9		integrated through the exercise of strong centralized
10		management (where, for example, authority over such
11		matters as purchasing, financing, tax compliance,
12		product line, personnel, marketing and capital
13		investment is not left to each member).
14		(B) In no event, for taxable years ending prior to
15		December 31, 2017, shall any unitary business group
16		include members which are ordinarily required to
17		apportion business income under different subsections
18		of Section 304 except that for tax years ending on or
19		after December 31, 1987 this prohibition shall not
20		apply to a holding company that would otherwise be a
21		member of a unitary business group with taxpayers that
22		apportion business income under any of subsections
23		(b), (c), (c-1), or (d) of Section 304. If a unitary
24		business group would, but for the preceding sentence,
25		include members that are ordinarily required to
26		apportion business income under different subsections

SB3865 Engrossed - 37 - LRB102 24242 RJF 33473 b
1		of Section 304, then for each subsection of Section
2		304 for which there are two or more members, there
3		shall be a separate unitary business group composed of
4		such members. For purposes of the preceding two
5		sentences, a member is "ordinarily required to
6		apportion business income" under a particular
7		subsection of Section 304 if it would be required to
8		use the apportionment method prescribed by such
9		subsection except for the fact that it derives
10		business income solely from Illinois. As used in this
11		paragraph, for taxable years ending before December
12		31, 2017, the phrase "United States" means only the 50
13		states and the District of Columbia, but does not
14		include any territory or possession of the United
15		States or any area over which the United States has
16		asserted jurisdiction or claimed exclusive rights with
17		respect to the exploration for or exploitation of
18		natural resources. For taxable years ending on or
19		after December 31, 2017, the phrase "United States",
20		as used in this paragraph, means only the 50 states,
21		the District of Columbia, and any area over which the
22		United States has asserted jurisdiction or claimed
23		exclusive rights with respect to the exploration for
24		or exploitation of natural resources, but does not
25		include any territory or possession of the United
26		States.

SB3865 Engrossed - 38 - LRB102 24242 RJF 33473 b
1		(C) Holding companies.
2		(i) For purposes of this subparagraph, a
3		"holding company" is a corporation (other than a
4		corporation that is a financial organization under
5		paragraph (8) of this subsection (a) of Section
6		1501 because it is a bank holding company under
7		the provisions of the Bank Holding Company Act of
8		1956 (12 U.S.C. 1841, et seq.) or because it is
9		owned by a bank or a bank holding company) that
10		owns a controlling interest in one or more other
11		taxpayers ("controlled taxpayers"); that, during
12		the period that includes the taxable year and the
13		2 immediately preceding taxable years or, if the
14		corporation was formed during the current or
15		immediately preceding taxable year, the taxable
16		years in which the corporation has been in
17		existence, derived substantially all its gross
18		income from dividends, interest, rents, royalties,
19		fees or other charges received from controlled
20		taxpayers for the provision of services, and gains
21		on the sale or other disposition of interests in
22		controlled taxpayers or in property leased or
23		licensed to controlled taxpayers or used by the
24		taxpayer in providing services to controlled
25		taxpayers; and that incurs no substantial expenses
26		other than expenses (including interest and other

SB3865 Engrossed - 39 - LRB102 24242 RJF 33473 b
1		costs of borrowing) incurred in connection with
2		the acquisition and holding of interests in
3		controlled taxpayers and in the provision of
4		services to controlled taxpayers or in the leasing
5		or licensing of property to controlled taxpayers.
6		(ii) The income of a holding company which is
7		a member of more than one unitary business group
8		shall be included in each unitary business group
9		of which it is a member on a pro rata basis, by
10		including in each unitary business group that
11		portion of the base income of the holding company
12		that bears the same proportion to the total base
13		income of the holding company as the gross
14		receipts of the unitary business group bears to
15		the combined gross receipts of all unitary
16		business groups (in both cases without regard to
17		the holding company) or on any other reasonable
18		basis, consistently applied.
19		(iii) A holding company shall apportion its
20		business income under the subsection of Section
21		304 used by the other members of its unitary
22		business group. The apportionment factors of a
23		holding company which would be a member of more
24		than one unitary business group shall be included
25		with the apportionment factors of each unitary
26		business group of which it is a member on a pro

SB3865 Engrossed - 40 - LRB102 24242 RJF 33473 b
1		rata basis using the same method used in clause
2		(ii).
3		(iv) The provisions of this subparagraph (C)
4		are intended to clarify existing law.
5		(D) If including the base income and factors of a
6		holding company in more than one unitary business
7		group under subparagraph (C) does not fairly reflect
8		the degree of integration between the holding company
9		and one or more of the unitary business groups, the
10		dependence of the holding company and one or more of
11		the unitary business groups upon each other, or the
12		contributions between the holding company and one or
13		more of the unitary business groups, the holding
14		company may petition the Director, under the
15		procedures provided under Section 304(f), for
16		permission to include all base income and factors of
17		the holding company only with members of a unitary
18		business group apportioning their business income
19		under one subsection of subsections (a), (b), (c), or
20		(d) of Section 304. If the petition is granted, the
21		holding company shall be included in a unitary
22		business group only with persons apportioning their
23		business income under the selected subsection of
24		Section 304 until the Director grants a petition of
25		the holding company either to be included in more than
26		one unitary business group under subparagraph (C) or

SB3865 Engrossed - 41 - LRB102 24242 RJF 33473 b
1		to include its base income and factors only with
2		members of a unitary business group apportioning their
3		business income under a different subsection of
4		Section 304.
5		(E) If the unitary business group members'
6		accounting periods differ, the common parent's
7		accounting period or, if there is no common parent,
8		the accounting period of the member that is expected
9		to have, on a recurring basis, the greatest Illinois
10		income tax liability must be used to determine whether
11		to use the apportionment method provided in subsection
12		(a) or subsection (h) of Section 304. The prohibition
13		against membership in a unitary business group for
14		taxpayers ordinarily required to apportion income
15		under different subsections of Section 304 does not
16		apply to taxpayers required to apportion income under
17		subsection (a) and subsection (h) of Section 304. The
18		provisions of this amendatory Act of 1998 apply to tax
19		years ending on or after December 31, 1998.
20		(28) Subchapter S corporation. The term "Subchapter S
21		corporation" means a corporation for which there is in
22		effect an election under Section 1362 of the Internal
23		Revenue Code, or for which there is a federal election to
24		opt out of the provisions of the Subchapter S Revision Act
25		of 1982 and have applied instead the prior federal
26		Subchapter S rules as in effect on July 1, 1982.

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1		(30) Foreign person. The term "foreign person" means
2		any person who is a nonresident noncitizen alien
3		individual and any nonindividual entity, regardless of
4		where created or organized, whose business activity
5		outside the United States is 80% or more of the entity's
6		total business activity.
7		(b) Other definitions.
8		(1) Words denoting number, gender, and so forth, when
9		used in this Act, where not otherwise distinctly expressed
10		or manifestly incompatible with the intent thereof:
11		(A) Words importing the singular include and apply
12		to several persons, parties or things;
13		(B) Words importing the plural include the
14		singular; and
15		(C) Words importing the masculine gender include
16		the feminine as well.
17		(2) "Company" or "association" as including successors
18		and assigns. The word "company" or "association", when
19		used in reference to a corporation, shall be deemed to
20		embrace the words "successors and assigns of such company
21		or association", and in like manner as if these last-named
22		words, or words of similar import, were expressed.
23		(3) Other terms. Any term used in any Section of this
24		Act with respect to the application of, or in connection
25		with, the provisions of any other Section of this Act

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1		shall have the same meaning as in such other Section.
2		(Source: P.A. 99-213, eff. 7-31-15; 100-22, eff. 7-6-17.)
3		Section 30. The Interstate Insurance Receivership Compact
4		Act is amended by changing Section 5 as follows:
5		(45 ILCS 160/5)
6		Sec. 5. Ratification of Compact. The State of Illinois
7		ratifies and approves the Interstate Insurance Receivership
8		Compact and enters into that Compact with all other
9		jurisdictions legally joining in it in substantially the
10		following form:
11		ARTICLE I. PURPOSES
12		The purposes of this Compact are, through means of joint
13		and cooperative action among the compacting states:
14		(1) to promote, develop and facilitate orderly, efficient,
15		cost-effective, and uniform insurer receivership laws and
16		operations;
17		(2) to coordinate interaction between insurer receivership
18		and Guaranty Association operations;
19		(3) to create the Interstate Insurance Receivership
20		Commission; and
21		(4) to perform these and such other related functions as
22		may be consistent with the state regulation of the business of
23		insurance pursuant to the McCarran-Ferguson Act.

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1		ARTICLE II. DEFINITIONS
2		For the purposes of this Compact:
3		(1) "By-laws" means those by-laws prescribed by the
4		Commission for its governance or for directing or controlling
5		the Commission's actions or conduct.
6		(2) "Compacting state" means any state which has enacted
7		enabling legislation for this Compact.
8		(3) "Commission" means the Interstate Insurance
9		Receivership Commission established by this Compact.
10		(4) "Commissioner" means the chief insurance regulatory
11		official of a state.
12		(5) "Deputy Receiver" means a person appointed or retained
13		by a Receiver and who is the Receiver's duly authorized
14		representative for administering one or more estates.
15		(6) "Domiciliary state" means the state in which an
16		insurer is incorporated or organized; or, in the case of a
17		non-domestic an alien insurer, its state of entry; or in the
18		case of an unauthorized insurer not incorporated, organized,
19		or entered in any state, a state where the insurer is engaged
20		in or doing business.
21		(7) "Estate" means the assets and liabilities of any
22		insurer in receivership.
23		(8) "Guaranty Association" means an insurance guaranty
24		fund or association or any similar entity now or hereafter
25		created by statute in a compacting state, other than a

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1		receivership, to pay or assume, in whole or in part, the
2		contractual claim obligations of insolvent insurers.
3		(9) "Insurer" means any person or entity that has done,
4		purports to do, is doing, or is licensed to do any insurance or
5		reinsurance business, or is or has been subject to the
6		authority of, or to liquidation, rehabilitation, supervision,
7		conservation, or ancillary receivership by, any Commissioner.
8		(10) "Member" means the Commissioner of a compacting state
9		or his or her designee, who shall be a person officially
10		connected with the Commissioner and who is wholly or
11		principally employed by the Commissioner.
12		(11) "Non-compacting state" means a state which has not
13		enacted enabling legislation for this Compact.
14		(12) "Operating procedures" means procedures promulgated
15		by the Commission implementing a rule, an existing law in a
16		compacting state, or a provision of this Compact.
17		(13) "Publication" means the act of publishing in the
18		official state publication in a compacting state or in such
19		other publication as may be established by the Commission.
20		(14) "Receiver" means receiver, liquidator, rehabilitator,
21		conservator, or ancillary receiver as the context requires.
22		(15) "Receivership" means any liquidation, rehabilitation,
23		conservation, or ancillary receivership proceeding as the
24		context requires.
25		(16) "Rules" means acts of the Commission, duly
26		promulgated pursuant to Article VII of this Compact,

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1		substantially affecting interested parties in addition to the
2		Commission, which shall have the force and effect of law in the
3		compacting states.
4		(17) "State" means any state, district or territory of the
5		United States of America.
6		ARTICLE III. ESTABLISHMENT OF THE COMMISSION AND VENUE
7		(1) The compacting states hereby create and establish an
8		entity known as the Interstate Insurance Receivership
9		Commission.
10		(2) The Commission is a body corporate of each compacting
11		state.
12		(3) The Commission is a not-for-profit entity, separate
13		and distinct from the compacting states.
14		(4) The Commission is solely responsible for its
15		liabilities except as otherwise provided in this Compact.
16		(5) Except as otherwise specifically provided in state or
17		federal law in the jurisdiction where the Commission's
18		principal office is located or where the Commission is acting
19		as Receiver, venue is proper and judicial proceedings by or
20		against the Commission shall be brought in a court of
21		competent jurisdiction where the Commission's principal office
22		is located.
23		ARTICLE IV. POWERS OF THE COMMISSION
24		The Commission shall have all of the following powers:

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1		(1) To promulgate rules which shall have the force and
2		effect of statutory law and shall be binding in the compacting
3		states to the extent and in the manner provided in this
4		Compact.
5		(2) To promulgate operating procedures which shall be
6		binding in the compacting states to the extent and in the
7		manner provided in this Compact.
8		(3) To oversee, supervise, and coordinate the activities
9		of receivers in compacting states.
10		(4) To act as Receiver of insurers organized under the
11		laws of, engaged in, or doing the business of insurance in a
12		compacting state upon the request of the Commissioner of such
13		state or when grounds for receivership by the Commission exist
14		under Article IX of this Compact.
15		(5) To act as Deputy Receiver of insurers organized under
16		the laws of, engaged in, or doing the business of insurance in
17		a non-compacting state in accordance with Article IX of this
18		Compact.
19		(6) To act as ancillary Receiver in a compacting state of
20		an insurer domiciled in a non-compacting state.
21		(7) To monitor the activities and functions of Guaranty
22		Associations in the compacting states.
23		(8) To delegate its operating authority or functions;
24		provided, that its rulemaking authority under Article VII of
25		this Compact shall not be delegated.
26		(9) To bring or prosecute legal proceedings or actions in

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1		its name as the Commission, or in the name of the Commission
2		acting as Receiver.
3		(10) To bring or prosecute legal proceedings or actions as
4		Receiver on behalf of an estate or its policyholders and
5		creditors; provided, that any Guaranty Association's standing
6		to sue or be sued under applicable law shall not be affected.
7		(11) To issue subpoenas requiring the attendance and
8		testimony of witnesses and the production of evidence.
9		(12) To establish and maintain offices.
10		(13) To purchase and maintain insurance and bonds.
11		(14) To borrow, accept, or contract for services of
12		personnel including, but not limited to, members and their
13		staff.
14		(15) To elect or appoint such officers, attorneys,
15		employees, or agents, and to fix their compensation, define
16		their duties, and determine their qualifications; and to
17		establish the Commission's personnel policies and programs
18		relating to, among other things, conflicts of interest, rates
19		of compensation, and qualifications of personnel.
20		(16) To accept any and all donations and grants of money,
21		equipment, supplies, materials, and services, and to receive,
22		utilize, and dispose of the same.
23		(17) To lease, purchase, accept gifts or donations of, or
24		otherwise to own, hold, improve or use, any property, real,
25		personal, or mixed.
26		(18) To sell, convey, mortgage, pledge, lease, exchange,

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1		abandon, or otherwise dispose of any property, real, personal,
2		or mixed.
3		(19) To enforce compliance with Commission rules,
4		operating procedures, and by-laws.
5		(20) To provide for dispute resolution among compacting
6		states and Receivers.
7		(21) To represent and advise compacting states on issues
8		relating to insurers domiciled or doing business in
9		non-compacting jurisdictions, consistent with the purposes of
10		this compact.
11		(22) To provide advice and training to receivership
12		personnel of compacting states, and to be a resource for
13		compacting states by maintaining a reference library of
14		relevant materials.
15		(23) To establish a budget and make expenditures.
16		(24) To borrow money.
17		(25) To appoint committees including, but not limited to,
18		an industry advisory committee and an executive committee of
19		members.
20		(26) To provide and receive information relating to
21		receiverships and Guaranty Associations and to cooperate with
22		law enforcement agencies.
23		(27) To adopt and use a corporate seal.
24		(28) To perform such other functions as may be necessary
25		or appropriate to achieve the purposes of this Compact as may
26		be consistent with the state regulation of the business of

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1		insurance pursuant to the McCarran-Ferguson Act.
2		ARTICLE V. ORGANIZATION OF THE COMMISSION
3		Section A. Membership, voting, and by-laws.
4		(1) A compacting state shall have and be limited to one
5		member. A member shall be qualified to serve in such capacity
6		under or pursuant to the applicable law of the compacting
7		state. A compacting state retains the discretionary right to
8		determine the due election or appointment and qualification of
9		its own Commissioner, and to fill all vacancies of its member.
10		(2) A member shall be entitled to one vote.
11		(3) The Commission shall, by a majority of the members,
12		prescribe by-laws to govern its conduct as may be necessary or
13		appropriate to carry out the purposes of the Compact,
14		including, but not limited to:
15		(a) establishing the fiscal year of the Commission;
16		(b) providing reasonable standards and procedures:
17		(i) for the establishment of committees, and (ii)
18		governing any general or specific delegation of any authority
19		or function of the Commission;
20		(c) providing reasonable procedures for calling and
21		conducting meetings of the Commission and for ensuring
22		reasonable notice of each such meeting;
23		(d) establishing the titles and responsibilities of
24		the officers of the Commission;
25		(e) providing reasonable standards and procedures for

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1		the establishment of the personnel policies and programs
2		of the Commission. Notwithstanding any civil service or
3		other similar laws of any compacting state, the by-laws
4		shall exclusively govern the personnel policies and
5		programs of the Commission; and
6		(f) providing a mechanism for winding up the
7		operations of the Commission and the equitable return of
8		any surplus funds that may exist after the dissolution of
9		the Compact after the payment or reserving of all of its
10		debts and obligations, or both.
11		Section B. Officers and personnel.
12		(1) The Commission shall, by a majority of the members,
13		elect annually from among its members a chairperson and a vice
14		chairperson, each of whom shall have such authorities and
15		duties as may be specified in the by-laws. The chairperson or,
16		in his or her absence or disability, a member designated in
17		accordance with the by-laws, shall preside at all meetings of
18		the Commission. The officers so elected shall serve without
19		compensation or remuneration from the Commission; provided,
20		that subject to the availability of budgeted funds, the
21		officers shall be reimbursed for any actual and necessary
22		costs and expenses incurred by them in the performance of
23		their duties and responsibilities as officers of the
24		Commission.
25		(2) The Commission may, by a majority of the members,

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1		appoint or retain an executive director for such period, upon
2		such terms and conditions and for such compensation as the
3		Commission may deem appropriate. The executive director shall
4		serve as secretary to the Commission, but shall not be a member
5		of the Commission. The executive director shall hire and
6		supervise such other staff as may be authorized by the
7		Commission.
8		Section C. Corporate records of the Commission. The
9		Commission shall maintain its corporate books and records in
10		accordance with the by-laws.
11		Section D. Qualified immunity, defense, and
12		indemnification.
13		(1) The members, officers, executive director, and
14		employees of the Commission shall be immune from suit and
15		liability, either personally or in their official capacity,
16		for any claim for damage to or loss of property or personal
17		injury or other civil liability caused or arising out of or
18		relating to any actual or alleged act, error, or omission that
19		occurred, or that such person had a reasonable basis for
20		believing occurred within the scope of Commission employment,
21		duties, or responsibilities; provided, that nothing in this
22		paragraph shall be construed to protect any such person from
23		suit or liability, or both, for any damage, loss, injury, or
24		liability caused by the intentional or willful and wanton

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1		misconduct of any such person, or to protect the Commission
2		acting as Receiver under Article IX of this Compact.
3		(2) The Commission shall defend any Commissioner of a
4		compacting state, his or her representatives or employees, or
5		the Commission's representatives or employees in any civil
6		action seeking to impose liability against such person arising
7		out of or relating to any actual or alleged act, error, or
8		omission that occurred within the scope of Commission
9		employment, duties, or responsibilities or that such person
10		had a reasonable basis for believing occurred within the scope
11		of Commission employment, duties, or responsibilities;
12		provided, that the actual or alleged act, error, or omission
13		did not result from gross negligence or intentional wrongdoing
14		on the part of such person.
15		(3) The Commission shall indemnify and hold the
16		Commissioner of a compacting state, his or her representatives
17		or employees, or the Commission's representatives or employees
18		harmless in the amount of any settlement or judgment obtained
19		against such person arising out of or relating to any actual or
20		alleged act, error, or omission that occurred within the scope
21		of Commission employment, duties, or responsibilities or that
22		such person had a reasonable basis for believing occurred
23		within the scope of Commission employment, duties, or
24		responsibilities; provided, that the actual or alleged act,
25		error, or omission did not result from gross negligence or
26		intentional wrongdoing on the part of such person.

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1		(4) The costs and expenses of defense and indemnification
2		of the Commission acting as Receiver of an estate shall be paid
3		as administrative expenses from the assets of that estate
4		unless such costs and expenses are covered by insurance
5		maintained by the Commission.
6		ARTICLE VI. MEETINGS AND ACTS OF THE COMMISSION
7		(1) The Commission shall meet and take such actions as are
8		consistent with the provisions of this Compact.
9		(2) Except as otherwise provided in this Compact and
10		unless a greater percentage is required by the by-laws, in
11		order to constitute an act of the Commission, such act shall
12		have been taken at a meeting of the Commission and shall have
13		received an affirmative vote of a majority of the members.
14		(3) Each member of the Commission shall have the right and
15		power to cast a vote to which that compacting state is entitled
16		and to participate in the business and affairs of the
17		Commission. A member shall vote in person and shall not
18		delegate his or her vote to another member. The by-laws may
19		provide for members' participation in meetings by telephone or
20		other means of telecommunication.
21		(4) The Commission shall meet at least once during each
22		calendar year. The chairperson of the Commission may call
23		additional meetings at any time and, upon the request of a
24		majority of the members, shall call additional meetings.
25		(5) The Commission's rules shall establish conditions and

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1		procedures under which the Commission shall make its
2		information and official records available to the public for
3		inspection or copying. The Commission may exempt from
4		disclosure any information or official records to the extent
5		disclosure would adversely affect personal privacy rights or
6		proprietary interests. In promulgating such rules, the
7		Commission may consider any special circumstances pertaining
8		to insurer insolvencies, but shall be guided by the principles
9		embodied in state and federal freedom of information laws. The
10		Commission may promulgate additional rules under which it may
11		make available to law enforcement agencies records and
12		information otherwise exempt from disclosure and may enter
13		into agreements with law enforcement agencies to receive or
14		exchange information or records subject to nondisclosure and
15		confidentiality provisions.
16		(6) Public notice shall be given of all meetings, and all
17		meetings shall be open to the public, except as set forth in
18		the rules or as otherwise provided in this Compact. The
19		Commission shall promulgate rules consistent with the
20		principles contained in the federal Government in Sunshine
21		Act, 5 U.S.C. Section 552b, as may be amended. The Commission
22		and any of its committees may close a meeting to the public
23		where it determines by two-thirds vote that an open meeting
24		would be likely to:
25		(a) relate solely to the Commission's internal
26		personnel practices and procedures;

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1		(b) disclose matters specifically exempted from
2		disclosure by statute;
3		(c) disclose trade secrets or commercial or financial
4		information which is privileged or confidential;
5		(d) involve accusing any person of a crime or formally
6		censuring any person;
7		(e) disclose information of a personal nature where
8		disclosure would constitute a clearly unwarranted invasion
9		of personal privacy;
10		(f) disclose investigatory records compiled for law
11		enforcement purposes;
12		(g) disclose information contained in or related to
13		examination, operating, or condition reports prepared by,
14		on behalf of, or for the use of the Commission with respect
15		to a regulated entity for the purpose of regulation or
16		supervision of such entity;
17		(h) disclose information, the premature disclosure of
18		which would significantly endanger the stability of a
19		regulated entity;
20		(i) specifically relate to the Commission's issuance
21		of a subpoena or its participation in a civil action or
22		proceeding.
23		(7) For every meeting closed pursuant to paragraph (6),
24		the Commission's chief legal officer shall publicly certify
25		that, in his or her opinion, the meeting may be closed to the
26		public and shall reference each relevant exemptive provision.

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1		The Commission shall keep minutes which shall fully and
2		clearly describe all matters discussed in any meeting and
3		shall provide a full and accurate summary of any actions taken
4		and the reasons therefor, including a description of each of
5		the views expressed on any item and the record of any roll call
6		vote (reflected in the vote of each member on the question).
7		All documents considered in connection with any action shall
8		be identified in such minutes.
9		ARTICLE VII. RULEMAKING FUNCTIONS OF THE COMMISSION
10		(1) The Commission shall promulgate rules and operating
11		procedures in order to effectively and efficiently achieve the
12		purposes of this Compact; provided, that the Commission shall
13		not promulgate any rules: (i) directly relating to Guaranty
14		Associations including, but not limited to, rules governing
15		coverage, funding, or assessment mechanisms, or (ii) (except
16		pursuant to rules promulgated under Article VII(3) of this
17		Compact) altering the statutory priorities for distributing
18		assets out of an estate.
19		(2) Rulemaking shall occur pursuant to the criteria set
20		forth in this Article and the rules and operating procedures
21		promulgated pursuant thereto. Such rulemaking shall
22		substantially conform to the principles of the federal
23		Administrative Procedure Act, 5 U.S.C.S. Section 551 et seq.
24		and the Federal Advisory Committee Act, 5 U.S.C.S. app. 2,
25		Section 1 et seq., as may be amended.

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1		(3) Other than the promulgation of such rules as are
2		necessary for the orderly operation of the Commission, the
3		first rule to be considered by the Commission shall be uniform
4		provisions governing insurer receiverships including, but not
5		limited to, provisions requiring compacting states to
6		implement, execute, and administer in a fair, just, effective,
7		and efficient manner rules and operating procedures relating
8		to receiverships. The Commission shall within 3 years of the
9		adoption of this Compact by 2 or more states, promulgate such
10		uniform provisions through the rulemaking process. Such
11		uniform provisions shall become law in all of the compacting
12		states upon legislative enactment in a majority of the
13		compacting states.
14		(4) All rules and amendments shall become binding as of
15		the date specified in each rule or amendment; provided, that
16		if a compacting state expressly rejects such rule or amendment
17		through legislative enactment as of the expiration of the
18		second full calendar year after such rule is promulgated, such
19		rule or amendment shall have no further force or effect in the
20		rejecting compacting state. If a majority of compacting states
21		reject a rule, then such rule shall have no further force or
22		effect in any compacting state.
23		(5) When promulgating a rule or operating procedure, the
24		Commission shall:
25		(a) effect publication of the proposed rulemaking,
26		stating with particularity the text of the rule or

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1		operating procedure which is proposed and the reason for
2		the proposed rule or operating procedure;
3		(b) allow persons to submit written data, facts,
4		opinions and arguments, which information the Commission
5		shall make publicly available;
6		(c) provide an opportunity for an informal hearing;
7		and
8		(d) promulgate a final rule or operating procedure and
9		its effective date, if appropriate, based on the
10		rulemaking record.
11		(6) Not later than 60 days after a rule or operating
12		procedure is promulgated, any interested person may file a
13		petition in a court of competent jurisdiction where the
14		Commission's principal office is located for judicial review
15		of such rule or operating procedure. If the court finds that
16		the Commission's action is not supported by substantial
17		evidence in the rulemaking record, the court shall hold the
18		rule unlawful and set it aside.
19		ARTICLE VIII. OVERSIGHT AND
20		DISPUTE RESOLUTION BY THE COMMISSION
21		Section A. Oversight.
22		(1) The Commission shall oversee the administration and
23		operations of receiverships in compacting states and shall
24		monitor receiverships being administered in non-compacting

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1		states which may significantly affect compacting states.
2		(2) To aid its monitoring, oversight, and coordination
3		responsibilities, the Commission shall establish operating
4		procedures requiring each member to submit written reports to
5		the Commission as follows:
6		(a) An initial report to the Commission upon a finding
7		or other official action by the compacting state that
8		grounds exist for receivership of an insurer doing
9		business in more than one state. Thereafter, reports shall
10		be submitted periodically and as otherwise required
11		pursuant to the Commission's operating procedures. The
12		Commission shall be entitled to receive notice of, and
13		shall have standing to appear in, compacting states'
14		receiverships.
15		(b) An initial report of the status of an insurer
16		within a reasonable time after the initiation of a
17		receivership.
18		(3) The Commission shall promulgate operating procedures
19		requiring Receivers to submit to the Commission periodic
20		written reports and such additional information and
21		documentation as the Commission may reasonably request. Each
22		compacting state's Receivers shall establish the capability to
23		obtain and provide all such records, data, and information
24		required by the Commission in accordance with the Commission's
25		operating procedures.
26		(4) Except as to privileged records, data, and

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1		information, the laws of any compacting state pertaining to
2		confidentiality or nondisclosure shall not relieve any
3		compacting state Commissioner of the responsibility to
4		disclose any relevant records, data, or information to the
5		Commission; provided, that disclosure to the Commission shall
6		not be deemed to waive or otherwise affect any confidentiality
7		requirement; and further provided, that the Commission shall
8		be subject to the compacting state's laws pertaining to
9		confidentiality and nondisclosure with respect to all such
10		records, data, and information in its possession.
11		(5) The courts and executive agencies in each compacting
12		state shall enforce this Compact and shall take all actions
13		necessary and appropriate to effectuate the Compact's purposes
14		and intent. In any receivership or other judicial or
15		administrative proceeding in a compacting state pertaining to
16		the subject matter of this Compact which may affect the
17		powers, responsibilities, or actions of the Commission, the
18		Commission shall be entitled to receive all service of process
19		in any such proceeding and shall have standing to intervene in
20		the receivership or proceeding for all purposes.
21		(6) The Commission shall analyze and correlate records,
22		data, information, and reports received from Receivers and
23		Guaranty Associations and shall make recommendations for
24		improving their performance to the compacting states. The
25		Commission shall include summary information and data
26		regarding its oversight functions in its annual report.

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1		Section B. Dispute resolution.
2		(1) The Commission shall attempt, upon the request of a
3		member, to resolve any disputes or other issues which are
4		subject to this Compact and which may arise among compacting
5		states and non-compacting states.
6		(2) The compacting states shall report to the Commission
7		on issues or activities of concern to them and cooperate with
8		and support the Commission in the discharge of its duties and
9		responsibilities.
10		(3) The Commission shall promulgate an operating procedure
11		providing for binding dispute resolution for disputes among
12		Receivers.
13		(4) The Commission shall facilitate voluntary dispute
14		resolution for disputes among Guaranty Associations and
15		Receivers.
16		ARTICLE IX. RECEIVERSHIP FUNCTIONS OF THE COMMISSION
17		(1) The Commission has authority to act as Receiver of any
18		insurer domiciled, engaged in, or doing business in a
19		compacting state upon the request of the Commissioner of such
20		compacting state or as otherwise provided in this Compact.
21		(a) The Commission as Receiver shall have all powers
22		and duties pursuant to the receivership laws of the
23		domiciliary state.
24		(b) The Commission shall maintain accounts of receipts

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1		and disbursements of the estates for which it is acting as
2		Receiver, consistent with the accounting practices and
3		procedures set forth in the by-laws.
4		(c) The Commission shall cause an annual audit of each
5		estate for which it is acting as Receiver, to be conducted
6		by an independent certified public accountant. The costs
7		and expenses of such audit shall be paid as administrative
8		expenses from the assets of the estate. The Commission
9		shall not cause an audit to be conducted of any estate that
10		lacks sufficient assets to conduct such audit.
11		(d) The Commission as Receiver is authorized to
12		delegate its receivership duties and functions and to
13		effectuate such delegation through contracts with others.
14		(2) The Commission shall act as Receiver of any insurer
15		domiciled or doing business in a compacting state in the event
16		that the member acting as Receiver in that compacting state
17		fails to comply with duly promulgated Commission rules or
18		operating procedures. The Commission shall notify such member
19		in writing of noncompliance with Commission rules or operating
20		procedures. If the member acting as Receiver fails to remedy
21		such noncompliance within 10 days after receipt of such
22		notification, the Commission may petition the supervising
23		court before which such receivership is pending for an order
24		substituting and appointing the Commission as Receiver of the
25		estate.
26		(3) The Commission shall not act as Receiver of an estate

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1		which appears to lack sufficient assets to fund such
2		receivership unless the compacting state makes provisions for
3		the payment of the estate's administrative expenses
4		satisfactory to the Commission.
5		(4) The Commission may act as Deputy Receiver for any
6		insurer domiciled or doing business in a non-compacting state
7		in accordance with such state's laws upon request of that
8		non-compacting state's Commissioner and approval of the
9		Commission.
10		(5) With respect to receiverships pending in a compacting
11		state on the effective date of the enactment of this Compact by
12		the compacting state:
13		(a) the Commission may act as Receiver of an insurer
14		upon the request of that compacting state's member and
15		approval of the Commission; and
16		(b) the Commission shall oversee, monitor, and
17		coordinate the activities of all receiverships pending in
18		that compacting state regardless whether the Commission is
19		acting as Receiver of estates in such state.
20		ARTICLE X. FINANCE
21		(1) The Commission shall pay or provide for the payment of
22		the reasonable expenses of its establishment and organization.
23		(2) Except as otherwise provided in this Compact or by act
24		of the Commission, the costs and expenses of each compacting
25		state shall be the sole and exclusive responsibility of the

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1		respective compacting state. The Commission may pay or provide
2		for actual and necessary costs and expenses for attendance of
3		its members at official meetings of the Commission or its
4		designated committees.
5		(3) The Commission shall levy on and collect an annual
6		assessment from each compacting state and each insurer
7		authorized to do business in a compacting state, and writing
8		direct insurance, to cover the cost of the internal operations
9		and activities of the Commission and its staff in a total
10		amount sufficient to cover the Commission's annual budget.
11		(a) The aggregate annual assessment amount shall be
12		allocated 75% to insurers, hereinafter referred to as the
13		"insurers' portion", and 25% to compacting states,
14		hereinafter referred to as the "compacting states'
15		portion". The insurer portion shall be allocated to each
16		insurer by the percentage derived from a fraction, the
17		numerator of which shall be the gross direct written
18		premium received on that insurer's business in all
19		compacting states and the denominator of which shall be
20		the gross direct written premium received by all insurers
21		on business in all compacting states. The compacting
22		states' portion shall be allocated to each compacting
23		state by the percentage derived from a fraction, the
24		numerator of which shall be the gross direct written
25		premium received by all insurers on business in that
26		compacting state and the denominator shall be the gross

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1		direct written premium received on all insurers on
2		business in all compacting states. A compacting state's
3		portion shall be funded as designated by that state's
4		legislature. In no event shall an insurer's assessment be
5		less than $50 or more than $25,000; provided, that
6		affiliated insurers' combined assessments shall not exceed
7		$50,000. Upon the request of an insurer, the Commission
8		may exempt or defer the assessment of any insurer if such
9		assessment would cause the insurer's financial impairment.
10		(b) These assessments shall not be used to pay any
11		costs or expenses incurred by the Commission and its staff
12		acting as Receiver of estates. Such costs and expenses
13		shall be paid as administrative expenses from the assets
14		of the estates as provided by law, except as otherwise
15		provided in this Compact.
16		(c) An insurer authorized to do business in a
17		compacting state shall timely pay assessments to the
18		Commission. Failure to pay such assessments shall not be
19		grounds for the revocation, suspension, or denial of an
20		insurer's authority to do business, but shall subject the
21		insurer to suit by the Commission for recovery of any
22		assessment due, attorneys' fees, and costs, together with
23		interest from the date the assessment is due at a rate of
24		10% per annum, and to civil forfeiture in an amount to be
25		determined by the Commissioner of that compacting state in
26		which the insurer received the greatest premium in the

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1		year next preceding the first year for which the insurer
2		shall be delinquent in payment of assessments.
3		(4) The Commission shall be reimbursed in the following
4		manner for the costs and expenses incurred by the Commission
5		and its staff acting as Receiver of estates to the extent that
6		an insurer's assets may be insufficient for the effective
7		administration of its estate:
8		(a) if the insurer is domiciled in a compacting state,
9		the estate shall be closed unless that compacting state
10		makes provisions for reimbursing the Commission; and
11		(b) if the insurer is unauthorized to do business in a
12		compacting state or if the insurer is domiciled in a
13		non-compacting state and subject to ancillary
14		receivership, then the Commission and such state shall
15		make provisions for reimbursing the Commission prior to
16		the Commission becoming Receiver of such insurer.
17		(5) To fund the cost of the initial operations of the
18		Commission until its first annual budget is adopted and
19		related assessments have been made, contributions from
20		compacting states and others may be accepted and a one time
21		assessment on insurers doing a direct insurance business in
22		the compacting states may be made not to exceed $450 per
23		insurer.
24		(6) The Commission's adopted budget for a fiscal year
25		shall not be approved until it has been subject to notice and
26		comment as set forth in Article VII of this Compact. The budget

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1		shall determine the amount of the annual assessment. The
2		Commission may accumulate a net worth not to exceed 30% of its
3		then annual cost of operation to provide for contingencies and
4		events not contemplated. These accumulated funds shall be held
5		separately and shall not be used for any other purpose. The
6		Commission's budget may include a provision for a contribution
7		to the Commission's net worth.
8		(7) The Commission shall be exempt from all taxation in
9		and by the compacting states.
10		(8) The Commission shall not pledge the credit of any
11		compacting state, except by and with the appropriate legal
12		authority of that compacting state.
13		(9) The Commission shall keep complete and accurate
14		accounts of all its internal receipts (including grants and
15		donations) and disbursements of all funds, other than
16		receivership assets, under its control. The internal financial
17		accounts of the Commission shall be subject to the accounting
18		procedures established under its by-laws. The financial
19		accounts and reports including the system of internal controls
20		and procedures of the Commission shall be audited annually by
21		an independent certified public accountant. Upon the
22		determination of the Commission, but no less frequently than
23		every 3 years, the review of such independent auditor shall
24		include a management and performance audit of the Commission.
25		The report of such independent audit shall be made available
26		to the public and shall be included in and become part of the

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1		annual report of the Commission to the Governors and
2		legislatures of the compacting states. The Commission's
3		internal accounts, any workpapers related to any internal
4		audit, and any workpapers related to the independent audit,
5		shall be confidential; provided, that such materials shall be
6		made available: (i) in compliance with the order of any court
7		of competent jurisdiction; (ii) pursuant to such reasonable
8		rules as the Commission shall promulgate; and (iii) to any
9		Commissioner, Governor of a compacting state, or their duly
10		authorized representatives.
11		(10) No compacting state shall have any claim to or
12		ownership of any property held by or vested in the Commission
13		or the Commission acting as Receiver or to any other
14		Commission funds held pursuant to the provisions of this
15		Compact.
16		ARTICLE XI. COMPACTING STATES, EFFECTIVE DATE, AND AMENDMENT
17		(1) Any state is eligible to become a compacting state.
18		(2) The Compact shall become effective and binding upon
19		legislative enactment of the Compact into law by 2 compacting
20		states. Thereafter, it shall become effective and binding as
21		to any other compacting state upon enactment of the Compact
22		into law by that state.
23		(3) Amendments to the Compact may be proposed by the
24		Commission for enactment by the compacting states. No
25		amendment shall become effective and binding upon the

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1		Commission and the compacting states unless and until it is
2		enacted into law by unanimous consent of the compacting
3		states.
4		ARTICLE XII. WITHDRAWAL, DEFAULT, AND TERMINATION
5		Section A. Withdrawal.
6		(1) Once effective, the Compact shall continue in force
7		and remain binding upon each and every compacting state;
8		provided, that a compacting state may withdraw from the
9		Compact ("withdrawing state") by enacting a statute
10		specifically repealing the statute which enacted the Compact
11		into law.
12		(2) The effective date of withdrawal is the effective date
13		of the repeal; provided, that the repeal shall not apply to any
14		receiverships, for which the Commission is acting as Receiver,
15		pending on the date of the repeal except by mutual agreement of
16		the Commission and the withdrawing state.
17		(3) The withdrawing state shall immediately notify the
18		Chairperson of the Commission in writing upon the introduction
19		of legislation repealing this Compact in the withdrawing
20		state.
21		(4) The Commission shall notify the other compacting
22		states of the withdrawing state's intent to withdraw within 60
23		days of its receipt thereof.
24		(5) The withdrawing state is responsible for all

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1		assessments, obligations, and liabilities incurred through the
2		effective date of withdrawal, including any obligations, the
3		performance of which extend beyond the effective date of
4		withdrawal, except to the extent those obligations may have
5		been released or relinquished by mutual agreement of the
6		Commission and the withdrawing state. Notwithstanding the
7		foregoing, the withdrawing state is responsible for the costs
8		and expenses of its estates subject to this Compact pending on
9		the date of repeal; the Commission and the other estates
10		subject to this Compact shall not bear any costs and expenses
11		related to the withdrawing state's estates unless otherwise
12		mutually agreed upon between the Commission and the
13		withdrawing state.
14		(6) Reinstatement following withdrawal of any compacting
15		state shall occur upon the withdrawing state reenacting the
16		Compact or upon such later date as determined by the
17		Commission.
18		Section B. Default.
19		(1) If the Commission determines that any compacting state
20		has at any time defaulted ("defaulting state") in the
21		performance of any of its obligations or responsibilities
22		under this Compact, the by-laws, or duly promulgated rules,
23		all rights, privileges, and benefits conferred by this Compact
24		and any agreements entered into pursuant to this Compact shall
25		be suspended from the effective date of default as fixed by the

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1		Commission. The grounds for default include, but are not
2		limited to, failure of a compacting state to perform such
3		obligations or responsibilities and any other grounds
4		designated in Commission rules. The Commission shall
5		immediately notify the defaulting state in writing of the
6		defaulting state's suspension pending a cure of the default.
7		The Commission shall stipulate the conditions and the time
8		period within which the defaulting state must cure its
9		default. If the defaulting state fails to cure the default
10		within the time period specified by the Commission, the
11		defaulting state shall be terminated from the Compact upon an
12		affirmative vote of a majority of the compacting states and
13		all rights, privileges, and benefits conferred by this Compact
14		shall be terminated from the effective date of termination.
15		(2) Within 60 days of the effective date of termination of
16		a defaulting state, the Commission shall notify the Governor
17		and the Majority and Minority Leaders of the defaulting
18		state's legislature of such termination.
19		(3) The termination of a defaulting state shall apply to
20		all receiverships, for which the Commission is acting as
21		Receiver, pending on the effective date of termination except
22		by mutual agreement of the Commission and the defaulting
23		state.
24		(4) The defaulting state is responsible for all
25		assessments, obligations, and liabilities incurred through the
26		effective date of termination and is responsible for the costs

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1		and expenses relating to its estates subject to this Compact
2		pending on the date of the termination. The Commission and the
3		other estates subject to this Compact shall not bear any costs
4		or expenses relating the defaulting state's estates unless
5		otherwise mutually agreed upon between the Commission and the
6		defaulting state.
7		(5) Reinstatement following termination of any compacting
8		state requires both a reenactment of the Compact by the
9		defaulting state and the approval of the Commission pursuant
10		to the rules.
11		Section C. Dissolution of Compact.
12		(1) The Compact dissolves effective upon the date of the
13		withdrawal or the termination by default of the compacting
14		state which reduces membership in the Compact to one
15		compacting state.
16		(2) Upon the dissolution of this Compact, the Compact
17		becomes null and void and shall be of no further force or
18		effect, and the business and affairs of the Commission shall
19		be wound up and any surplus funds shall be distributed in
20		accordance with the by-laws.
21		ARTICLE XIII. SEVERABILITY AND CONSTRUCTION
22		(1) The provisions of this Compact shall be severable, and
23		if any phrase, clause, sentence, or provision is deemed
24		unenforceable, the remaining provisions of the Compact shall

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1		be enforceable.
2		(2) The provisions of this Compact shall be liberally
3		construed to effectuate its purposes.
4		ARTICLE XIV. BINDING EFFECT OF COMPACT AND OTHER LAWS
5		Section A. Other laws.
6		(1) Nothing herein prevents the enforcement of any other
7		law of a compacting state that is not inconsistent with this
8		Compact.
9		(2) All compacting states' laws conflicting with this
10		Compact are superseded to the extent of the conflict.
11		Section B. Binding effect of this Compact.
12		(1) All lawful actions of the Commission, including all
13		rules and operating procedures promulgated by the Commission,
14		are binding upon the compacting states.
15		(2) All agreements between the Commission and the
16		compacting states are binding in accordance with their terms.
17		(3) Upon the request of a party to a conflict over meaning
18		or interpretation of Commission actions, and upon a majority
19		vote of the compacting states, the Commission may issue
20		advisory opinions regarding such meaning or interpretation.
21		(4) In the event any provision of this Compact exceeds the
22		constitutional limits imposed on the legislature of any
23		compacting state, the obligations, duties, powers, or

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1		jurisdiction sought to be conferred by such provision upon the
2		Commission shall be ineffective and such obligations, duties,
3		powers or jurisdiction shall remain in the compacting state
4		and shall be exercised by the agency thereof to which such
5		obligations, duties, powers, or jurisdiction are delegated by
6		law in effect at the time this Compact becomes effective.
7		(Source: P.A. 95-331, eff. 8-21-07.)
8		Section 35. The Interstate Insurance Product Regulation
9		Compact is amended by changing Section 10 as follows:
10		(45 ILCS 162/10)
11		Sec. 10. Ratification. The State of Illinois ratifies,
12		approves, and adopts the following interstate compact:
13		Article I. PURPOSES
14		The purposes of this Compact are, through means of joint
15		and cooperative action among the Compacting States:
16		1. To promote and protect the interest of consumers of
17		individual and group annuity, life insurance, disability
18		income and long-term care insurance products;
19		2. To develop uniform standards for insurance products
20		covered under the Compact;
21		3. To establish a central clearinghouse to receive and
22		provide prompt review of insurance products covered under
23		the Compact and, in certain cases, advertisements related

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1		thereto, submitted by insurers authorized to do business
2		in one or more Compacting States;
3		4. To give appropriate regulatory approval to those
4		product filings and advertisements satisfying the
5		applicable uniform standard;
6		5. To improve coordination of regulatory resources and
7		expertise between state insurance departments regarding
8		the setting of uniform standards and review of insurance
9		products covered under the Compact;
10		6. To create the Interstate Insurance Product
11		Regulation Commission; and
12		7. To perform these and such other related functions
13		as may be consistent with the state regulation of the
14		business of insurance.
15		Article II. DEFINITIONS
16		For purposes of this Compact:
17		1. "Advertisement" means any material designed to
18		create public interest in a Product, or induce the public
19		to purchase, increase, modify, reinstate, borrow on,
20		surrender, replace or retain a policy, as more
21		specifically defined in the Rules and Operating Procedures
22		of the Commission.
23		2. "Bylaws" mean those bylaws established by the
24		Commission for its governance, or for directing or
25		controlling the Commission's actions or conduct.

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1		3. "Compacting State" means any State which has
2		enacted this Compact legislation and which has not
3		withdrawn pursuant to Article XIV, Section 1, or been
4		terminated pursuant to Article XIV, Section 2.
5		4. "Commission" means the "Interstate Insurance
6		Product Regulation Commission" established by this
7		Compact.
8		5. "Commissioner" means the chief insurance regulatory
9		official of a State including, but not limited to
10		commissioner, superintendent, director or administrator.
11		6. "Domiciliary State" means the state in which an
12		Insurer is incorporated or organized; or, in the case of a
13		non-domestic an alien Insurer, its state of entry.
14		7. "Insurer" means any entity licensed by a State to
15		issue contracts of insurance for any of the lines of
16		insurance covered by this Act.
17		8. "Member" means the person chosen by a Compacting
18		State as its representative to the Commission, or his or
19		her designee.
20		9. "Non-compacting State" means any State which is not
21		at the time a Compacting State.
22		10. "Operating Procedures" mean procedures promulgated
23		by the Commission implementing a Rule, Uniform Standard or
24		a provision of this Compact.
25		11. "Product" means the form of a policy or contract,
26		including any application, endorsement, or related form

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1		which is attached to and made a part of the policy or
2		contract, and any evidence of coverage or certificate, for
3		an individual or group annuity, life insurance, disability
4		income or long-term care insurance product that an Insurer
5		is authorized to issue.
6		12. "Rule" means a statement of general or particular
7		applicability and future effect promulgated by the
8		Commission, including a Uniform Standard developed
9		pursuant to Article VII of this Compact, designed to
10		implement, interpret, or prescribe law or policy or
11		describing the organization, procedure, or practice
12		requirements of the Commission, which shall have the force
13		and effect of law in the Compacting States.
14		13. "State" means any state, district or territory of
15		the United States of America.
16		14. "Third-Party Filer" means an entity that submits a
17		Product filing to the Commission on behalf of an Insurer.
18		15. "Uniform Standard" means a standard adopted by the
19		Commission for a Product line, pursuant to Article VII of
20		this Compact, and shall include all of the Product
21		requirements in aggregate; provided, that each Uniform
22		Standard shall be construed, whether express or implied,
23		to prohibit the use of any inconsistent, misleading or
24		ambiguous provisions in a Product and the form of the
25		Product made available to the public shall not be unfair,
26		inequitable or against public policy as determined by the

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1		Commission.
2		Article III. ESTABLISHMENT OF THE COMMISSION AND VENUE
3		1. The Compacting States hereby create and establish a
4		joint public agency known as the "Interstate Insurance Product
5		Regulation Commission." Pursuant to Article IV, the Commission
6		will have the power to develop Uniform Standards for Product
7		lines, receive and provide prompt review of Products filed
8		therewith, and give approval to those Product filings
9		satisfying applicable Uniform Standards; provided, it is not
10		intended for the Commission to be the exclusive entity for
11		receipt and review of insurance product filings. Nothing
12		herein shall prohibit any Insurer from filing its product in
13		any State wherein the Insurer is licensed to conduct the
14		business of insurance; and any such filing shall be subject to
15		the laws of the State where filed.
16		2. The Commission is a body corporate and politic, and an
17		instrumentality of the Compacting States.
18		3. The Commission is solely responsible for its
19		liabilities except as otherwise specifically provided in this
20		Compact.
21		4. Venue is proper and judicial proceedings by or against
22		the Commission shall be brought solely and exclusively in a
23		Court of competent jurisdiction where the principal office of
24		the Commission is located.

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1		Article IV. POWERS OF THE COMMISSION
2		The Commission shall have the following powers:
3		1. To promulgate Rules, pursuant to Article VII of
4		this Compact, which shall have the force and effect of law
5		and shall be binding in the Compacting States to the
6		extent and in the manner provided in this Compact;
7		2. To exercise its rule-making authority and establish
8		reasonable Uniform Standards for Products covered under
9		the Compact, and Advertisement related thereto, which
10		shall have the force and effect of law and shall be binding
11		in the Compacting States, but only for those Products
12		filed with the Commission, provided, that a Compacting
13		State shall have the right to opt out of such Uniform
14		Standard pursuant to Article VII, to the extent and in the
15		manner provided in this Compact, and, provided further,
16		that any Uniform Standard established by the Commission
17		for long-term care insurance products may provide the same
18		or greater protections for consumers as, but shall not
19		provide less than, those protections set forth in the
20		National Association of Insurance Commissioners' Long-Term
21		Care Insurance Model Act and Long-Term Care Insurance
22		Model Regulation, respectively, adopted as of 2001. The
23		Commission shall consider whether any subsequent
24		amendments to the NAIC Long-Term Care Insurance Model Act
25		or Long-Term Care Insurance Model Regulation adopted by
26		the NAIC require amending of the Uniform Standards

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1		established by the Commission for long-term care insurance
2		products;
3		3. To receive and review in an expeditious manner
4		Products filed with the Commission, and rate filings for
5		disability income and long-term care insurance Products,
6		and give approval of those Products and rate filings that
7		satisfy the applicable Uniform Standard, where such
8		approval shall have the force and effect of law and be
9		binding on the Compacting States to the extent and in the
10		manner provided in the Compact;
11		4. To receive and review in an expeditious manner
12		Advertisement relating to long-term care insurance
13		products for which Uniform Standards have been adopted by
14		the Commission, and give approval to all Advertisement
15		that satisfies the applicable Uniform Standard. For any
16		product covered under this Compact, other than long-term
17		care insurance products, the Commission shall have the
18		authority to require an insurer to submit all or any part
19		of its Advertisement with respect to that product for
20		review or approval prior to use, if the Commission
21		determines that the nature of the product is such that an
22		Advertisement of the product could have the capacity or
23		tendency to mislead the public. The actions of Commission
24		as provided in this section shall have the force and
25		effect of law and shall be binding in the Compacting
26		States to the extent and in the manner provided in the

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1		Compact;
2		5. To exercise its rule-making authority and designate
3		Products and Advertisement that may be subject to a
4		self-certification process without the need for prior
5		approval by the Commission.
6		6. To promulgate Operating Procedures, pursuant to
7		Article VII of this Compact, which shall be binding in the
8		Compacting States to the extent and in the manner provided
9		in this Compact;
10		7. To bring and prosecute legal proceedings or actions
11		in its name as the Commission; provided, that the standing
12		of any state insurance department to sue or be sued under
13		applicable law shall not be affected;
14		8. To issue subpoenas requiring the attendance and
15		testimony of witnesses and the production of evidence;
16		9. To establish and maintain offices;
17		10. To purchase and maintain insurance and bonds;
18		11. To borrow, accept or contract for services of
19		personnel, including, but not limited to, employees of a
20		Compacting State;
21		12. To hire employees, professionals or specialists,
22		and elect or appoint officers, and to fix their
23		compensation, define their duties and give them
24		appropriate authority to carry out the purposes of the
25		Compact, and determine their qualifications; and to
26		establish the Commission's personnel policies and programs

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1		relating to, among other things, conflicts of interest,
2		rates of compensation and qualifications of personnel;
3		13. To accept any and all appropriate donations and
4		grants of money, equipment, supplies, materials and
5		services, and to receive, utilize and dispose of the same;
6		provided that at all times the Commission shall strive to
7		avoid any appearance of impropriety;
8		14. To lease, purchase, accept appropriate gifts or
9		donations of, or otherwise to own, hold, improve or use,
10		any property, real, personal or mixed; provided that at
11		all times the Commission shall strive to avoid any
12		appearance of impropriety;
13		15. To sell, convey, mortgage, pledge, lease,
14		exchange, abandon or otherwise dispose of any property,
15		real, personal or mixed;
16		16. To remit filing fees to Compacting States as may
17		be set forth in the Bylaws, Rules or Operating Procedures;
18		17. To enforce compliance by Compacting States with
19		Rules, Uniform Standards, Operating Procedures and Bylaws;
20		18. To provide for dispute resolution among Compacting
21		States;
22		19. To advise Compacting States on issues relating to
23		Insurers domiciled or doing business in Non-compacting
24		jurisdictions, consistent with the purposes of this
25		Compact;
26		20. To provide advice and training to those personnel

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1		in state insurance departments responsible for product
2		review, and to be a resource for state insurance
3		departments;
4		21. To establish a budget and make expenditures;
5		22. To borrow money;
6		23. To appoint committees, including advisory
7		committees comprising Members, state insurance regulators,
8		state legislators or their representatives, insurance
9		industry and consumer representatives, and such other
10		interested persons as may be designated in the Bylaws;
11		24. To provide and receive information from, and to
12		cooperate with law enforcement agencies;
13		25. To adopt and use a corporate seal; and
14		26. To perform such other functions as may be
15		necessary or appropriate to achieve the purposes of this
16		Compact consistent with the state regulation of the
17		business of insurance.
18		Article V. ORGANIZATION OF THE COMMISSION
19		1. Membership, Voting and Bylaws.
20		a. Each Compacting State shall have and be limited to one
21		Member. Each Member shall be qualified to serve in that
22		capacity pursuant to applicable law of the Compacting State.
23		Any Member may be removed or suspended from office as provided
24		by the law of the State from which he or she shall be
25		appointed. Any vacancy occurring in the Commission shall be

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1		filled in accordance with the laws of the Compacting State
2		wherein the vacancy exists. Nothing herein shall be construed
3		to affect the manner in which a Compacting State determines
4		the election or appointment and qualification of its own
5		Commissioner.
6		b. Each Member shall be entitled to one vote and shall have
7		an opportunity to participate in the governance of the
8		Commission in accordance with the Bylaws. Notwithstanding any
9		provision herein to the contrary, no action of the Commission
10		with respect to the promulgation of a Uniform Standard shall
11		be effective unless two-thirds (2/3) of the Members vote in
12		favor thereof.
13		c. The Commission shall, by a majority of the Members,
14		prescribe Bylaws to govern its conduct as may be necessary or
15		appropriate to carry out the purposes, and exercise the
16		powers, of the Compact, including, but not limited to:
17		i. establishing the fiscal year of the Commission;
18		ii. providing reasonable procedures for appointing
19		and electing members, as well as holding meetings, of
20		the Management Committee;
21		iii. providing reasonable standards and
22		procedures: (i) for the establishment and meetings of
23		other committees, and (ii) governing any general or
24		specific delegation of any authority or function of
25		the Commission;
26		iv. providing reasonable procedures for calling

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1		and conducting meetings of the Commission that
2		consists of a majority of Commission members, ensuring
3		reasonable advance notice of each such meeting, and
4		providing for the right of citizens to attend each
5		such meeting with enumerated exceptions designed to
6		protect the public's interest, the privacy of
7		individuals, and insurers' proprietary information,
8		including trade secrets. The Commission may meet in
9		camera only after a majority of the entire membership
10		votes to close a meeting en toto or in part. As soon as
11		practicable, the Commission must make public (i) a
12		copy of the vote to close the meeting revealing the
13		vote of each Member with no proxy votes allowed, and
14		(ii) votes taken during such meeting;
15		v. establishing the titles, duties and authority
16		and reasonable procedures for the election of the
17		officers of the Commission;
18		vi. providing reasonable standards and procedures
19		for the establishment of the personnel policies and
20		programs of the Commission. Notwithstanding any civil
21		service or other similar laws of any Compacting State,
22		the Bylaws shall exclusively govern the personnel
23		policies and programs of the Commission;
24		vii. promulgating a code of ethics to address
25		permissible and prohibited activities of commission
26		members and employees; and

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1		viii. providing a mechanism for winding up the
2		operations of the Commission and the equitable
3		disposition of any surplus funds that may exist after
4		the termination of the Compact after the payment
5		and/or reserving of all of its debts and obligations.
6		d. The Commission shall publish its bylaws in a convenient
7		form and file a copy thereof and a copy of any amendment
8		thereto, with the appropriate agency or officer in each of the
9		Compacting States.
10		2. Management Committee, Officers and Personnel.
11		a. A Management Committee comprising no more than fourteen
12		(14) members shall be established as follows:
13		(i) One (1) member from each of the six (6)
14		Compacting States with the largest premium volume for
15		individual and group annuities, life, disability
16		income and long-term care insurance products,
17		determined from the records of the NAIC for the prior
18		year;
19		(ii) Four (4) members from those Compacting States
20		with at least two percent (2%) of the market based on
21		the premium volume described above, other than the six
22		(6) Compacting States with the largest premium volume,
23		selected on a rotating basis as provided in the
24		Bylaws, and;
25		(iii) Four (4) members from those Compacting
26		States with less than two percent (2%) of the market,

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1		based on the premium volume described above, with one
2		(1) selected from each of the four (4) zone regions of
3		the NAIC as provided in the Bylaws.
4		b. The Management Committee shall have such authority and
5		duties as may be set forth in the Bylaws, including but not
6		limited to:
7		i. managing the affairs of the Commission in a
8		manner consistent with the Bylaws and purposes of the
9		Commission;
10		ii. establishing and overseeing an organizational
11		structure within, and appropriate procedures for, the
12		Commission to provide for the creation of Uniform
13		Standards and other Rules, receipt and review of
14		product filings, administrative and technical support
15		functions, review of decisions regarding the
16		disapproval of a product filing, and the review of
17		elections made by a Compacting State to opt out of a
18		Uniform Standard; provided that a Uniform Standard
19		shall not be submitted to the Compacting States for
20		adoption unless approved by two-thirds (2/3) of the
21		members of the Management Committee;
22		iii. overseeing the offices of the Commission; and
23		iv. planning, implementing, and coordinating
24		communications and activities with other state,
25		federal and local government organizations in order to
26		advance the goals of the Commission.

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1		c. The Commission shall elect annually officers from the
2		Management Committee, with each having such authority and
3		duties, as may be specified in the Bylaws.
4		d. The Management Committee may, subject to the approval
5		of the Commission, appoint or retain an executive director for
6		such period, upon such terms and conditions and for such
7		compensation as the Commission may deem appropriate. The
8		executive director shall serve as secretary to the Commission,
9		but shall not be a Member of the Commission. The executive
10		director shall hire and supervise such other staff as may be
11		authorized by the Commission.
12		3. Legislative and Advisory Committees.
13		a. A legislative committee comprising state legislators or
14		their designees shall be established to monitor the operations
15		of, and make recommendations to, the Commission, including the
16		Management Committee; provided that the manner of selection
17		and term of any legislative committee member shall be as set
18		forth in the Bylaws. Prior to the adoption by the Commission of
19		any Uniform Standard, revision to the Bylaws, annual budget or
20		other significant matter as may be provided in the Bylaws, the
21		Management Committee shall consult with and report to the
22		legislative committee.
23		b. The Commission shall establish two (2) advisory
24		committees, one of which shall comprise consumer
25		representatives independent of the insurance industry, and the
26		other comprising insurance industry representatives.

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1		c. The Commission may establish additional advisory
2		committees as its Bylaws may provide for the carrying out of
3		its functions.
4		4. Corporate Records of the Commission. The Commission
5		shall maintain its corporate books and records in accordance
6		with the Bylaws.
7		5. Qualified Immunity, Defense and Indemnification.
8		a. The Members, officers, executive director, employees
9		and representatives of the Commission shall be immune from
10		suit and liability, either personally or in their official
11		capacity, for any claim for damage to or loss of property or
12		personal injury or other civil liability caused by or arising
13		out of any actual or alleged act, error or omission that
14		occurred, or that the person against whom the claim is made had
15		a reasonable basis for believing occurred within the scope of
16		Commission employment, duties or responsibilities; provided,
17		that nothing in this paragraph shall be construed to protect
18		any such person from suit and/or liability for any damage,
19		loss, injury or liability caused by the intentional or willful
20		and wanton misconduct of that person.
21		b. The Commission shall defend any Member, officer,
22		executive director, employee or representative of the
23		Commission in any civil action seeking to impose liability
24		arising out of any actual or alleged act, error or omission
25		that occurred within the scope of Commission employment,
26		duties or responsibilities, or that the person against whom

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1		the claim is made had a reasonable basis for believing
2		occurred within the scope of Commission employment, duties or
3		responsibilities; provided, that nothing herein shall be
4		construed to prohibit that person from retaining his or her
5		own counsel; and provided further, that the actual or alleged
6		act, error or omission did not result from that person's
7		intentional or willful and wanton misconduct.
8		c. The Commission shall indemnify and hold harmless any
9		Member, officer, executive director, employee or
10		representative of the Commission for the amount of any
11		settlement or judgment obtained against that person arising
12		out of any actual or alleged act, error or omission that
13		occurred within the scope of Commission employment, duties or
14		responsibilities, or that such person had a reasonable basis
15		for believing occurred within the scope of Commission
16		employment, duties or responsibilities, provided, that the
17		actual or alleged act, error or omission did not result from
18		the intentional or willful and wanton misconduct of that
19		person.
20		Article VI. MEETINGS AND ACTS OF THE COMMISSION
21		1. The Commission shall meet and take such actions as are
22		consistent with the provisions of this Compact and the Bylaws.
23		2. Each Member of the Commission shall have the right and
24		power to cast a vote to which that Compacting State is entitled
25		and to participate in the business and affairs of the

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1		Commission. A Member shall vote in person or by such other
2		means as provided in the Bylaws. The Bylaws may provide for
3		Members' participation in meetings by telephone or other means
4		of communication.
5		3. The Commission shall meet at least once during each
6		calendar year. Additional meetings shall be held as set forth
7		in the Bylaws.
8		Article VII. RULES & OPERATING PROCEDURES: RULEMAKING
9		FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM
10		STANDARDS
11		1. Rulemaking Authority. The Commission shall promulgate
12		reasonable Rules, including Uniform Standards, and Operating
13		Procedures in order to effectively and efficiently achieve the
14		purposes of this Compact. Notwithstanding the foregoing, in
15		the event the Commission exercises its rulemaking authority in
16		a manner that is beyond the scope of the purposes of this Act,
17		or the powers granted hereunder, then such an action by the
18		Commission shall be invalid and have no force and effect.
19		2. Rulemaking Procedure. Rules and Operating Procedures
20		shall be made pursuant to a rulemaking process that conforms
21		to the Model State Administrative Procedure Act of 1981 as
22		amended, as may be appropriate to the operations of the
23		Commission. Before the Commission adopts a Uniform Standard,
24		the Commission shall give written notice to the relevant state
25		legislative committee(s) in each Compacting State responsible

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1		for insurance issues of its intention to adopt the Uniform
2		Standard. The Commission in adopting a Uniform Standard shall
3		consider fully all submitted materials and issue a concise
4		explanation of its decision.
5		3. Effective Date and Opt Out of a Uniform Standard. A
6		Uniform Standard shall become effective ninety (90) days after
7		its promulgation by the Commission or such later date as the
8		Commission may determine; provided, however, that a Compacting
9		State may opt out of a Uniform Standard as provided in this
10		Article. "Opt out" shall be defined as any action by a
11		Compacting State to decline to adopt or participate in a
12		promulgated Uniform Standard. All other Rules and Operating
13		Procedures, and amendments thereto, shall become effective as
14		of the date specified in each Rule, Operating Procedure or
15		amendment.
16		4. Opt Out Procedure. A Compacting State may opt out of a
17		Uniform Standard, either by legislation or regulation duly
18		promulgated by the Insurance Department under the Compacting
19		State's Administrative Procedure Act. If a Compacting State
20		elects to opt out of a Uniform Standard by regulation, it must
21		(a) give written notice to the Commission no later than ten
22		(10) business days after the Uniform Standard is promulgated,
23		or at the time the State becomes a Compacting State and (b)
24		find that the Uniform Standard does not provide reasonable
25		protections to the citizens of the State, given the conditions
26		in the State. The Commissioner shall make specific findings of

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1		fact and conclusions of law, based on a preponderance of the
2		evidence, detailing the conditions in the State which warrant
3		a departure from the Uniform Standard and determining that the
4		Uniform Standard would not reasonably protect the citizens of
5		the State. The Commissioner must consider and balance the
6		following factors and find that the conditions in the State
7		and needs of the citizens of the State outweigh: (i) the intent
8		of the legislature to participate in, and the benefits of, an
9		interstate agreement to establish national uniform consumer
10		protections for the Products subject to this Act; and (ii) the
11		presumption that a Uniform Standard adopted by the Commission
12		provides reasonable protections to consumers of the relevant
13		Product.
14		Notwithstanding the foregoing, a Compacting State may, at
15		the time of its enactment of this Compact, prospectively opt
16		out of all Uniform Standards involving long-term care
17		insurance products by expressly providing for such opt out in
18		the enacted Compact, and such an opt out shall not be treated
19		as a material variance in the offer or acceptance of any State
20		to participate in this Compact. Such an opt out shall be
21		effective at the time of enactment of this Compact by the
22		Compacting State and shall apply to all existing Uniform
23		Standards involving long-term care insurance products and
24		those subsequently promulgated.
25		5. Effect of Opt Out. If a Compacting State elects to opt
26		out of a Uniform Standard, the Uniform Standard shall remain

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1		applicable in the Compacting State electing to opt out until
2		such time the opt out legislation is enacted into law or the
3		regulation opting out becomes effective.
4		Once the opt out of a Uniform Standard by a Compacting
5		State becomes effective as provided under the laws of that
6		State, the Uniform Standard shall have no further force and
7		effect in that State unless and until the legislation or
8		regulation implementing the opt out is repealed or otherwise
9		becomes ineffective under the laws of the State. If a
10		Compacting State opts out of a Uniform Standard after the
11		Uniform Standard has been made effective in that State, the
12		opt out shall have the same prospective effect as provided
13		under Article XIV for withdrawals.
14		6. Stay of Uniform Standard. If a Compacting State has
15		formally initiated the process of opting out of a Uniform
16		Standard by regulation, and while the regulatory opt out is
17		pending, the Compacting State may petition the Commission, at
18		least fifteen (15) days before the effective date of the
19		Uniform Standard, to stay the effectiveness of the Uniform
20		Standard in that State. The Commission may grant a stay if it
21		determines the regulatory opt out is being pursued in a
22		reasonable manner and there is a likelihood of success. If a
23		stay is granted or extended by the Commission, the stay or
24		extension thereof may postpone the effective date by up to
25		ninety (90) days, unless affirmatively extended by the
26		Commission; provided, a stay may not be permitted to remain in

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1		effect for more than one (1) year unless the Compacting State
2		can show extraordinary circumstances which warrant a
3		continuance of the stay, including, but not limited to, the
4		existence of a legal challenge which prevents the Compacting
5		State from opting out. A stay may be terminated by the
6		Commission upon notice that the rulemaking process has been
7		terminated.
8		7. Not later than thirty (30) days after a Rule or
9		Operating Procedure is promulgated, any person may file a
10		petition for judicial review of the Rule or Operating
11		Procedure; provided, that the filing of such a petition shall
12		not stay or otherwise prevent the Rule or Operating Procedure
13		from becoming effective unless the court finds that the
14		petitioner has a substantial likelihood of success. The court
15		shall give deference to the actions of the Commission
16		consistent with applicable law and shall not find the Rule or
17		Operating Procedure to be unlawful if the Rule or Operating
18		Procedure represents a reasonable exercise of the Commission's
19		authority.
20		Article VIII. COMMISSION RECORDS AND ENFORCEMENT
21		1. The Commission shall promulgate Rules establishing
22		conditions and procedures for public inspection and copying of
23		its information and official records, except such information
24		and records involving the privacy of individuals and insurers'
25		trade secrets. The Commission may promulgate additional Rules

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1		under which it may make available to federal and state
2		agencies, including law enforcement agencies, records and
3		information otherwise exempt from disclosure, and may enter
4		into agreements with such agencies to receive or exchange
5		information or records subject to nondisclosure and
6		confidentiality provisions.
7		2. Except as to privileged records, data and information,
8		the laws of any Compacting State pertaining to confidentiality
9		or nondisclosure shall not relieve any Compacting State
10		Commissioner of the duty to disclose any relevant records,
11		data or information to the Commission; provided, that
12		disclosure to the Commission shall not be deemed to waive or
13		otherwise affect any confidentiality requirement; and further
14		provided, that, except as otherwise expressly provided in this
15		Act, the Commission shall not be subject to the Compacting
16		State's laws pertaining to confidentiality and nondisclosure
17		with respect to records, data and information in its
18		possession. Confidential information of the Commission shall
19		remain confidential after such information is provided to any
20		Commissioner.
21		3. The Commission shall monitor Compacting States for
22		compliance with duly adopted Bylaws, Rules, including Uniform
23		Standards, and Operating Procedures. The Commission shall
24		notify any non-complying Compacting State in writing of its
25		noncompliance with Commission Bylaws, Rules or Operating
26		Procedures. If a non-complying Compacting State fails to

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1		remedy its noncompliance within the time specified in the
2		notice of noncompliance, the Compacting State shall be deemed
3		to be in default as set forth in Article XIV.
4		4. The Commissioner of any State in which an Insurer is
5		authorized to do business, or is conducting the business of
6		insurance, shall continue to exercise his or her authority to
7		oversee the market regulation of the activities of the Insurer
8		in accordance with the provisions of the State's law. The
9		Commissioner's enforcement of compliance with the Compact is
10		governed by the following provisions:
11		a. With respect to the Commissioner's market regulation of
12		a Product or Advertisement that is approved or certified to
13		the Commission, the content of the Product or Advertisement
14		shall not constitute a violation of the provisions, standards
15		or requirements of the Compact except upon a final order of the
16		Commission, issued at the request of a Commissioner after
17		prior notice to the Insurer and an opportunity for hearing
18		before the Commission.
19		b. Before a Commissioner may bring an action for violation
20		of any provision, standard or requirement of the Compact
21		relating to the content of an Advertisement not approved or
22		certified to the Commission, the Commission, or an authorized
23		Commission officer or employee, must authorize the action.
24		However, authorization pursuant to this Paragraph does not
25		require notice to the Insurer, opportunity for hearing or
26		disclosure of requests for authorization or records of the

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1		Commission's action on such requests.
2		Article IX. DISPUTE RESOLUTION
3		The Commission shall attempt, upon the request of a
4		Member, to resolve any disputes or other issues that are
5		subject to this Compact and which may arise between two or more
6		Compacting States, or between Compacting States and
7		Non-compacting States, and the Commission shall promulgate an
8		Operating Procedure providing for resolution of such disputes.
9		Article X. PRODUCT FILING AND APPROVAL
10		1. Insurers and Third-Party Filers seeking to have a
11		Product approved by the Commission shall file the Product
12		with, and pay applicable filing fees to, the Commission.
13		Nothing in this Act shall be construed to restrict or
14		otherwise prevent an insurer from filing its Product with the
15		insurance department in any State wherein the insurer is
16		licensed to conduct the business of insurance, and such filing
17		shall be subject to the laws of the States where filed.
18		2. The Commission shall establish appropriate filing and
19		review processes and procedures pursuant to Commission Rules
20		and Operating Procedures. Notwithstanding any provision herein
21		to the contrary, the Commission shall promulgate Rules to
22		establish conditions and procedures under which the Commission
23		will provide public access to Product filing information. In
24		establishing such Rules, the Commission shall consider the

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1		interests of the public in having access to such information,
2		as well as protection of personal medical and financial
3		information and trade secrets, that may be contained in a
4		Product filing or supporting information.
5		3. Any Product approved by the Commission may be sold or
6		otherwise issued in those Compacting States for which the
7		Insurer is legally authorized to do business.
8		Article XI. REVIEW OF COMMISSION DECISIONS REGARDING FILINGS
9		1. Not later than thirty (30) days after the Commission
10		has given notice of a disapproved Product or Advertisement
11		filed with the Commission, the Insurer or Third Party Filer
12		whose filing was disapproved may appeal the determination to a
13		review panel appointed by the Commission. The Commission shall
14		promulgate Rules to establish procedures for appointing such
15		review panels and provide for notice and hearing. An
16		allegation that the Commission, in disapproving a Product or
17		Advertisement filed with the Commission, acted arbitrarily,
18		capriciously, or in a manner that is an abuse of discretion or
19		otherwise not in accordance with the law, is subject to
20		judicial review in accordance with Article III, section 5.
21		2. The Commission shall have authority to monitor, review
22		and reconsider Products and Advertisement subsequent to their
23		filing or approval upon a finding that the product does not
24		meet the relevant Uniform Standard. Where appropriate, the
25		Commission may withdraw or modify its approval after proper

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1		notice and hearing, subject to the appeal process in section 1
2		above.
3		Article XII. FINANCE
4		1. The Commission shall pay or provide for the payment of
5		the reasonable expenses of its establishment and organization.
6		To fund the cost of its initial operations, the Commission may
7		accept contributions and other forms of funding from the
8		National Association of Insurance Commissioners, Compacting
9		States and other sources. Contributions and other forms of
10		funding from other sources shall be of such a nature that the
11		independence of the Commission concerning the performance of
12		its duties shall not be compromised.
13		2. The Commission shall collect a filing fee from each
14		Insurer and Third Party Filer filing a product with the
15		Commission to cover the cost of the operations and activities
16		of the Commission and its staff in a total amount sufficient to
17		cover the Commission's annual budget.
18		3. The Commission's budget for a fiscal year shall not be
19		approved until it has been subject to notice and comment as set
20		forth in Article VII of this Compact.
21		4. The Commission shall be exempt from all taxation in and
22		by the Compacting States.
23		5. The Commission shall not pledge the credit of any
24		Compacting State, except by and with the appropriate legal
25		authority of that Compacting State.

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1		6. The Commission shall keep complete and accurate
2		accounts of all its internal receipts, including grants and
3		donations, and disbursements of all funds under its control.
4		The internal financial accounts of the Commission shall be
5		subject to the accounting procedures established under its
6		Bylaws. The financial accounts and reports including the
7		system of internal controls and procedures of the Commission
8		shall be audited annually by an independent certified public
9		accountant. Upon the determination of the Commission, but no
10		less frequently than every three (3) years, the review of the
11		independent auditor shall include a management and performance
12		audit of the Commission. The Commission shall make an Annual
13		Report to the Governor and legislature of the Compacting
14		States, which shall include a report of the independent audit.
15		The Commission's internal accounts shall not be confidential
16		and such materials may be shared with the Commissioner of any
17		Compacting State upon request, provided, however, that any
18		work papers related to any internal or independent audit and
19		any information regarding the privacy of individuals and
20		insurers' proprietary information, including trade secrets,
21		shall remain confidential.
22		7. No Compacting State shall have any claim to or
23		ownership of any property held by or vested in the Commission
24		or to any Commission funds held pursuant to the provisions of
25		this Compact.

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1		Article XIII. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT
2		1. Any State is eligible to become a Compacting State.
3		2. The Compact shall become effective and binding upon
4		legislative enactment of the Compact into law by two
5		Compacting States; provided, the Commission shall become
6		effective for purposes of adopting Uniform Standards for,
7		reviewing, and giving approval or disapproval of, Products
8		filed with the Commission that satisfy applicable Uniform
9		Standards only after twenty-six (26) States are Compacting
10		States or, alternatively, by States representing greater than
11		forty percent (40%) of the premium volume for life insurance,
12		annuity, disability income and long-term care insurance
13		products, based on records of the NAIC for the prior year.
14		Thereafter, it shall become effective and binding as to any
15		other Compacting State upon enactment of the Compact into law
16		by that State.
17		3. Amendments to the Compact may be proposed by the
18		Commission for enactment by the Compacting States. No
19		amendment shall become effective and binding upon the
20		Commission and the Compacting States unless and until all
21		Compacting States enact the amendment into law.
22		Article XIV. WITHDRAWAL, DEFAULT AND TERMINATION
23		1. Withdrawal.
24		a. Once effective, the Compact shall continue in force and
25		remain binding upon each and every Compacting State; provided,

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1		that a Compacting State may withdraw from the Compact
2		("Withdrawing State") by enacting a statute specifically
3		repealing the statute which enacted the Compact into law.
4		b. The effective date of withdrawal is the effective date
5		of the repealing statute. However, the withdrawal shall not
6		apply to any product filings approved or self-certified, or
7		any Advertisement of such products, on the date the repealing
8		statute becomes effective, except by mutual agreement of the
9		Commission and the Withdrawing State unless the approval is
10		rescinded by the Withdrawing State as provided in subsection
11		e. of this section.
12		c. The Commissioner of the Withdrawing State shall
13		immediately notify the Management Committee in writing upon
14		the introduction of legislation repealing this Compact in the
15		Withdrawing State.
16		d. The Commission shall notify the other Compacting States
17		of the introduction of such legislation within ten (10) days
18		after its receipt of notice thereof.
19		e. The Withdrawing State is responsible for all
20		obligations, duties and liabilities incurred through the
21		effective date of withdrawal, including any obligations, the
22		performance of which extend beyond the effective date of
23		withdrawal, except to the extent those obligations may have
24		been released or relinquished by mutual agreement of the
25		Commission and the Withdrawing State. The Commission's
26		approval of Products and Advertisement prior to the effective

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1		date of withdrawal shall continue to be effective and be given
2		full force and effect in the Withdrawing State, unless
3		formally rescinded by the Withdrawing State in the same manner
4		as provided by the laws of the Withdrawing State for the
5		prospective disapproval of products or advertisement
6		previously approved under state law.
7		f. Reinstatement following withdrawal of any Compacting
8		State shall occur upon the effective date of the Withdrawing
9		State reenacting the Compact.
10		2. Default.
11		a. If the Commission determines that any Compacting State
12		has at any time defaulted ("Defaulting State") in the
13		performance of any of its obligations or responsibilities
14		under this Compact, the Bylaws or duly promulgated Rules or
15		Operating Procedures, then, after notice and hearing as set
16		forth in the Bylaws, all rights, privileges and benefits
17		conferred by this Compact on the Defaulting State shall be
18		suspended from the effective date of default as fixed by the
19		Commission. The grounds for default include, but are not
20		limited to, failure of a Compacting State to perform its
21		obligations or responsibilities, and any other grounds
22		designated in Commission Rules. The Commission shall
23		immediately notify the Defaulting State in writing of the
24		Defaulting State's suspension pending a cure of the default.
25		The Commission shall stipulate the conditions and the time
26		period within which the Defaulting State must cure its

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1		default. If the Defaulting State fails to cure the default
2		within the time period specified by the Commission, the
3		Defaulting State shall be terminated from the Compact and all
4		rights, privileges and benefits conferred by this Compact
5		shall be terminated from the effective date of termination.
6		b. Product approvals by the Commission or product
7		self-certifications, or any Advertisement in connection with
8		such product, that are in force on the effective date of
9		termination shall remain in force in the Defaulting State in
10		the same manner as if the Defaulting State had withdrawn
11		voluntarily pursuant to paragraph 1 of this Article.
12		c. Reinstatement following termination of any Compacting
13		State requires a reenactment of the Compact.
14		3. Dissolution of Compact.
15		a. The Compact dissolves effective upon the date of the
16		withdrawal or default of the Compacting State which reduces
17		membership in the Compact to one Compacting State.
18		b. Upon the dissolution of this Compact, the Compact
19		becomes null and void and shall be of no further force or
20		effect, and the business and affairs of the Commission shall
21		be wound up and any surplus funds shall be distributed in
22		accordance with the Bylaws.
23		Article XV. SEVERABILITY AND CONSTRUCTION
24		1. The provisions of this Compact shall be severable; and
25		if any phrase, clause, sentence or provision is deemed

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1		unenforceable, the remaining provisions of the Compact shall
2		be enforceable.
3		2. The provisions of this Compact shall be liberally
4		construed to effectuate its purposes.
5		Article XVI. BINDING EFFECT OF COMPACT AND OTHER LAWS
6		1. Other Laws.
7		a. Nothing herein prevents the enforcement of any other
8		law of a Compacting State, except as provided in paragraph b of
9		this Article.
10		b. For any Product approved or certified to the
11		Commission, the Rules, Uniform Standards and any other
12		requirements of the Commission shall constitute the exclusive
13		provisions applicable to the content, approval and
14		certification of such Products. For Advertisement that is
15		subject to the Commission's authority, any Rule, Uniform
16		Standard or other requirement of the Commission which governs
17		the content of the Advertisement shall constitute the
18		exclusive provision that a Commissioner may apply to the
19		content of the Advertisement. Notwithstanding the foregoing,
20		no action taken by the Commission shall abrogate or restrict:
21		(i) the access of any person to state courts; (ii) remedies
22		available under state law related to breach of contract, tort,
23		or other laws not specifically directed to the content of the
24		Product; (iii) state law relating to the construction of
25		insurance contracts; or (iv) the authority of the attorney

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1		general of the state, including but not limited to maintaining
2		any actions or proceedings, as authorized by law.
3		c. All insurance products filed with individual States
4		shall be subject to the laws of those States.
5		2. Binding Effect of this Compact.
6		a. All lawful actions of the Commission, including all
7		Rules and Operating Procedures promulgated by the Commission,
8		are binding upon the Compacting States.
9		b. All agreements between the Commission and the
10		Compacting States are binding in accordance with their terms.
11		c. Upon the request of a party to a conflict over the
12		meaning or interpretation of Commission actions, and upon a
13		majority vote of the Compacting States, the Commission may
14		issue advisory opinions regarding the meaning or
15		interpretation in dispute.
16		d. In the event any provision of this Compact exceeds the
17		constitutional limits imposed on the legislature of any
18		Compacting State, the obligations, duties, powers or
19		jurisdiction sought to be conferred by that provision upon the
20		Commission shall be ineffective as to that Compacting State,
21		and those obligations, duties, powers or jurisdiction shall
22		remain in the Compacting State and shall be exercised by the
23		agency thereof to which those obligations, duties, powers or
24		jurisdiction are delegated by law in effect at the time this
25		Compact becomes effective.
26		(Source: P.A. 96-1481, eff. 11-29-10.)

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1		Section 40. The Counties Code is amended by changing
2		Section 3-12007 as follows:
3		(55 ILCS 5/3-12007) (from Ch. 34, par. 3-12007)
4		Sec. 3-12007. Proposed rules for classified service. (a)
5		The Director of Personnel shall prepare and submit to the
6		commission proposed rules for the classified service. The
7		director shall give at least 10 days' notice to the heads of
8		all departments or agencies affected and they shall be given
9		an opportunity, upon their request, to appear before the
10		commission to express their views thereon before action is
11		taken by the commission.
12		(b) The rules, as adopted pursuant to subsection (a) of
13		Section 3-12005 shall provide for:
14		(1) preparation, maintenance and revision of a position
15		classification plan for all positions in the classified
16		service, based upon the similarity of duties performed and
17		responsibilities assumed, so that the same qualifications may
18		reasonably be required and the same schedule of pay may be
19		applied to all positions in the same class. Each position
20		authorized by the Board shall be allocated by the director to
21		the proper class and assigned to the appropriate pay range for
22		that class.
23		(2) promotion which shall give appropriate consideration
24		to the applicant's qualifications, record of performance,

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1		seniority, and conduct. Vacancies shall be filled by promotion
2		whenever practicable and in the best interest of the county
3		service, and preference may be given to employees within the
4		department in which the vacancy occurs.
5		(3) open competitive examinations to determine the
6		relative fitness of applicants for the respective competitive
7		positions.
8		(4) competitive selection of employees for all classes in
9		the classified service.
10		(5) establishment of lists of eligibles for appointment
11		and promotion, upon which lists shall be placed the names of
12		successful candidates in the order of their relative
13		excellence in the respective examinations. The duration of
14		eligible lists for initial appointment shall be for no more
15		than one year unless extended by the director for not more than
16		one additional year; lists of eligibles for promotion shall be
17		maintained for as long as the tests on which they are based are
18		considered valid by the director.
19		(6) certification by the director to the appointing
20		authorities of not more than the top 5 names from the list of
21		eligibles for a single vacancy.
22		(7) rejection of candidates who do not comply with
23		reasonable job requirements in regard to such factors as age,
24		physical condition, training and experience, or who are
25		addicted to alcohol or narcotics or have been guilty of
26		infamous or disgraceful conduct or are illegal noncitizens

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1		aliens.
2		(8) periods of probationary employment. During the initial
3		probation period following appointment any employee may be
4		discharged or demoted without charges or hearing except that
5		any applicant or employee, regardless of status, who has
6		reason to believe that he/she has been discriminated against
7		because of religious opinions or affiliation, or race, sex, or
8		national origin in any personnel action may appeal to the
9		commission in accordance with the provisions of this Division
10		or in appropriate rules established by the commission pursuant
11		to subsection (a) of Section 3-12005.
12		(9) provisional employment without competitive
13		examinations when there is no appropriate eligible list
14		available. No person hired as a provisional employee shall
15		continue on the county payroll longer than 6 months per
16		calendar year nor shall successive provisional appointments be
17		allowed.
18		(10) transfer from a position in one department to a
19		position in another department involving similar
20		qualifications, duties, responsibilities and salary.
21		(11) procedures for authorized reinstatement within one
22		year of persons who resign in good standing.
23		(12) layoff by reason of lack of funds or work or abolition
24		of the position, or material changes in duties or
25		organization, and for the layoff of nontenured employees
26		first, and for the reemployment of permanent employees so laid

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1		off, giving consideration in both layoff and reemployment to
2		performance record and seniority in service.
3		(13) keeping records of performance of all employees in
4		the classified service.
5		(14) suspension, demotion or dismissal of an employee for
6		misconduct, inefficiency, incompetence, insubordination,
7		malfeasance or other unfitness to render effective service and
8		for the investigation and hearing of appeals of any employee
9		recommended for suspension, demotion or dismissal by a
10		department head for any of the foregoing reasons.
11		(15) establishment of a plan for resolving employee
12		grievances and complaints, including an appeals procedure.
13		(16) hours of work, holidays and attendance regulations,
14		and for annual, sick and special leaves of absence, with or
15		without pay, or at reduced pay.
16		(17) development of employee morale, safety and training
17		programs.
18		(18) establishment of a period of probation, the length of
19		which shall be determined by the complexity of the work
20		involved, but which shall not exceed one year without special
21		written approval from the commission.
22		(19) such other rules, not inconsistent with this
23		Division, as may be proper and necessary for its enforcement.
24		(Source: P.A. 86-962.)
25		Section 45. The Illinois Municipal Code is amended by

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1		changing Section 11-74.2-14 as follows:
2		(65 ILCS 5/11-74.2-14) (from Ch. 24, par. 11-74.2-14)
3		Sec. 11-74.2-14. The corporate authorities may at any time
4		transfer and sell the fee simple title, or any lesser estate
5		that they acquired to all or any part of the real property
6		within the redevelopment area. No such sale shall be
7		inconsistent with the provisions of paragraph (e) of Section
8		11-74.2-8.
9		Such sales and transfers may be made to:
10		(1) Any individual, association or corporation, organized
11		under the laws of this State or of any other State or country,
12		which may legally make such investments in this State,
13		including foreign and non-domestic alien insurance companies,
14		as defined in Section 2 of the "Illinois Insurance Code"; or
15		(2) Any body politic and corporate, public corporation or
16		private individual, corporation, association or interest
17		empowered by law to acquire, develop and use such real
18		property for such uses, public or private, as are in
19		accordance with the final redevelopment plan.
20		To provide that the real property sold by the corporate
21		authorities is used in accordance with the final redevelopment
22		plan, the corporate authorities shall inquire into and satisfy
23		themselves concerning the financial ability of the purchaser
24		to complete the redevelopment in accordance with the
25		redevelopment plan and shall require the purchaser to execute

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1		in writing such undertakings as the corporate authorities may
2		deem necessary to obligate the purchaser to:
3		(1) Use the land for the purposes designated in the
4		approved plan;
5		(2) Commence and complete the building of the improvements
6		or the renovation of the property within the periods of time
7		which the corporate authorities fix as reasonable; and
8		(3) Comply with such other conditions as are necessary to
9		carry out the purposes of the final redevelopment plan.
10		Any redevelopment area may be sold either as an entirety
11		or in such parcels as the corporate authorities may select. It
12		is not necessary that title be acquired to all real property
13		within the redevelopment area before the sale of a part
14		thereof may be made as provided in this Section. All real
15		property sold shall be sold at its use value which may be less
16		than its acquisition cost. For purposes of this Division, use
17		value represents the value at which the corporate authorities
18		determine that such land should be made available in order
19		that it may be developed or redeveloped for the purposes
20		specified in the final redevelopment plan.
21		(Source: P.A. 81-3.)
22		Section 50. The Metropolitan Water Reclamation District
23		Act is amended by changing Section 11.15 as follows:
24		(70 ILCS 2605/11.15) (from Ch. 42, par. 331.15)

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1		Sec. 11.15. No person shall be employed upon contracts for
2		work to be done by any such sanitary district unless he or she
3		is a citizen of the United States, a national of the United
4		States under Section 1401 of Title 8 of the United States Code,
5		a person an alien lawfully admitted for permanent residence
6		under Section 1101 of Title 8 of the United States Code, an
7		individual who has been granted asylum under Section 1158 of
8		Title 8 of the United States Code, or an individual who is
9		otherwise legally authorized to work in the United States.
10		(Source: P.A. 98-280, eff. 8-9-13; 99-231, eff. 8-3-15.)
11		Section 55. The Board of Higher Education Act is amended
12		by changing Section 9.16 as follows:
13		(110 ILCS 205/9.16) (from Ch. 144, par. 189.16)
14		Sec. 9.16. Underrepresentation of certain groups in higher
15		education. To require public institutions of higher education
16		to develop and implement methods and strategies to increase
17		the participation of minorities, women and individuals with
18		disabilities who are traditionally underrepresented in
19		education programs and activities. For the purpose of this
20		Section, minorities shall mean persons who are citizens of the
21		United States or lawful permanent resident noncitizens aliens
22		of the United States and who are any of the following:
23		(1) American Indian or Alaska Native (a person having
24		origins in any of the original peoples of North and South

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1		America, including Central America, and who maintains
2		tribal affiliation or community attachment).
3		(2) Asian (a person having origins in any of the
4		original peoples of the Far East, Southeast Asia, or the
5		Indian subcontinent, including, but not limited to,
6		Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
7		the Philippine Islands, Thailand, and Vietnam).
8		(3) Black or African American (a person having origins
9		in any of the black racial groups of Africa).
10		(4) Hispanic or Latino (a person of Cuban, Mexican,
11		Puerto Rican, South or Central American, or other Spanish
12		culture or origin, regardless of race).
13		(5) Native Hawaiian or Other Pacific Islander (a
14		person having origins in any of the original peoples of
15		Hawaii, Guam, Samoa, or other Pacific Islands).
16		The Board shall adopt any rules necessary to administer
17		this Section. The Board shall also do the following:
18		(a) require all public institutions of higher education to
19		develop and submit plans for the implementation of this
20		Section;
21		(b) conduct periodic review of public institutions of
22		higher education to determine compliance with this Section;
23		and if the Board finds that a public institution of higher
24		education is not in compliance with this Section, it shall
25		notify the institution of steps to take to attain compliance;
26		(c) provide advice and counsel pursuant to this Section;

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1		(d) conduct studies of the effectiveness of methods and
2		strategies designed to increase participation of students in
3		education programs and activities in which minorities, women
4		and individuals with disabilities are traditionally
5		underrepresented, and monitor the success of students in such
6		education programs and activities;
7		(e) encourage minority student recruitment and retention
8		in colleges and universities. In implementing this paragraph,
9		the Board shall undertake but need not be limited to the
10		following: the establishment of guidelines and plans for
11		public institutions of higher education for minority student
12		recruitment and retention, the review and monitoring of
13		minority student programs implemented at public institutions
14		of higher education to determine their compliance with any
15		guidelines and plans so established, the determination of the
16		effectiveness and funding requirements of minority student
17		programs at public institutions of higher education, the
18		dissemination of successful programs as models, and the
19		encouragement of cooperative partnerships between community
20		colleges and local school attendance centers which are
21		experiencing difficulties in enrolling minority students in
22		four-year colleges and universities;
23		(f) mandate all public institutions of higher education to
24		submit data and information essential to determine compliance
25		with this Section. The Board shall prescribe the format and
26		the date for submission of this data and any other education

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1		equity data; and
2		(g) report to the General Assembly and the Governor
3		annually with a description of the plans submitted by each
4		public institution of higher education for implementation of
5		this Section, including financial data relating to the most
6		recent fiscal year expenditures for specific minority
7		programs, the effectiveness of such plans and programs and the
8		effectiveness of the methods and strategies developed by the
9		Board in meeting the purposes of this Section, the degree of
10		compliance with this Section by each public institution of
11		higher education as determined by the Board pursuant to its
12		periodic review responsibilities, and the findings made by the
13		Board in conducting its studies and monitoring student success
14		as required by paragraph d) of this Section. With respect to
15		each public institution of higher education such report also
16		shall include, but need not be limited to, information with
17		respect to each institution's minority program budget
18		allocations; minority student admission, retention and
19		graduation statistics; admission, retention, and graduation
20		statistics of all students who are the first in their
21		immediate family to attend an institution of higher education;
22		number of financial assistance awards to undergraduate and
23		graduate minority students; and minority faculty
24		representation. This paragraph shall not be construed to
25		prohibit the Board from making, preparing or issuing
26		additional surveys or studies with respect to minority

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1		education in Illinois.
2		(Source: P.A. 102-465, eff. 1-1-22.)
3		Section 60. The Dental Student Grant Act is amended by
4		changing Section 3.06 as follows:
5		(110 ILCS 925/3.06) (from Ch. 144, par. 1503.06)
6		Sec. 3.06. "Eligible dental student" means a person who
7		meets all of the following qualifications:
8		(a) That the individual is a resident of this State and a
9		citizen or lawful permanent resident noncitizen alien of the
10		United States;
11		(b) That the individual has been accepted in a dental
12		school located in Illinois;
13		(c) That the individual exhibits financial need as
14		determined by the Department;
15		(d) That the individual has earned an educational diploma
16		at an institution of education located in this State or has
17		been a resident of the State for no less than 3 years prior to
18		applying for the grant;
19		(e) That the individual is a member of a racial minority as
20		defined in Section 3.07; and
21		(f) That the individual meets other qualifications which
22		shall be established by the Department.
23		(Source: P.A. 87-665.)

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1		Section 65. The Diversifying Higher Education Faculty in
2		Illinois Act is amended by changing Sections 2 and 7 as
3		follows:
4		(110 ILCS 930/2) (from Ch. 144, par. 2302)
5		Sec. 2. Definitions. As used in this Act, unless the
6		context otherwise requires:
7		"Board" means the Board of Higher Education.
8		"DFI" means the Diversifying Higher Education Faculty in
9		Illinois Program of financial assistance to minorities who are
10		traditionally underrepresented as participants in
11		postsecondary education. The program shall assist them in
12		pursuing a graduate or professional degree and shall also
13		assist program graduates to find employment at an Illinois
14		institution of higher education, including a community
15		college, in a faculty or staff position.
16		"Program Board" means the entity created to administer the
17		grant program authorized by this Act.
18		"Qualified institution of higher education" means a
19		qualifying publicly or privately operated educational
20		institution located within Illinois (i) that offers
21		instruction leading toward or prerequisite to an academic or
22		professional degree beyond the baccalaureate degree, excluding
23		theological schools, and (ii) that is authorized to operate in
24		the State of Illinois.
25		"Racial minority" means a person who is a citizen of the

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1		United States or a lawful permanent resident noncitizen alien
2		of the United States and who is any of the following:
3		(1) American Indian or Alaska Native (a person having
4		origins in any of the original peoples of North and South
5		America, including Central America, and who maintains
6		tribal affiliation or community attachment).
7		(2) Asian (a person having origins in any of the
8		original peoples of the Far East, Southeast Asia, or the
9		Indian subcontinent, including, but not limited to,
10		Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
11		the Philippine Islands, Thailand, and Vietnam).
12		(3) Black or African American (a person having origins
13		in any of the black racial groups of Africa).
14		(4) Hispanic or Latino (a person of Cuban, Mexican,
15		Puerto Rican, South or Central American, or other Spanish
16		culture or origin, regardless of race).
17		(5) Native Hawaiian or Other Pacific Islander (a
18		person having origins in any of the original peoples of
19		Hawaii, Guam, Samoa, or other Pacific Islands).
20		(Source: P.A. 102-465, eff. 1-1-22.)
21		(110 ILCS 930/7) (from Ch. 144, par. 2307)
22		Sec. 7. Eligibility for DFI grants. An individual is
23		eligible for an award under the provisions of this Act when the
24		Program Board finds:
25		(a) That the individual is a resident of this State

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1		and a citizen or lawful permanent resident noncitizen
2		alien of the United States;
3		(b) That the individual is a member of a racial
4		minority as defined under the terms of this Act;
5		(c) That the individual has earned any educational
6		diploma at an institution of education located in this
7		State, or is a resident of the State for no less than three
8		years prior to applying for the grant, and the individual
9		must hold a baccalaureate degree from an institution of
10		higher learning;
11		(d) That the individual's financial resources are such
12		that, in the absence of a DFI grant, the individual will be
13		prevented from pursuing a graduate or professional degree
14		at a qualified institution of higher education of his or
15		her choice;
16		(e) That the individual has above average academic
17		ability to pursue a graduate or professional degree; and
18		(f) That the individual meets other qualifications
19		which shall be established by the Program Board.
20		Grant funds shall be awarded only to those persons
21		pursuing a graduate or professional degree program at a
22		qualified institution of higher education.
23		The Board shall by rule promulgate, pursuant to the
24		Illinois Administrative Procedure Act, precise standards to be
25		used by the Program Board to determine whether a program
26		applicant has above average academic ability to pursue a

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1		graduate or professional degree.
2		(Source: P.A. 93-862, eff. 8-4-04.)
3		Section 70. The Higher Education Student Assistance Act is
4		amended by changing Sections 65.50 and 65.110 as follows:
5		(110 ILCS 947/65.50)
6		Sec. 65.50. Teacher training full-time undergraduate
7		scholarships.
8		(a) Five hundred new scholarships shall be provided each
9		year for qualified high school students or high school
10		graduates who desire to pursue full-time undergraduate studies
11		in teacher education at public or private universities or
12		colleges and community colleges in this State. The Commission,
13		in accordance with rules and regulations promulgated for this
14		program, shall provide funding and shall designate each year's
15		new recipients from among those applicants who qualify for
16		consideration by showing:
17		(1) that he or she is a resident of this State and a
18		citizen or a lawful permanent resident noncitizen alien of
19		the United States;
20		(2) that he or she has successfully completed the
21		program of instruction at an approved high school or is a
22		student in good standing at such a school and is engaged in
23		a program that will be completed by the end of the academic
24		year, and in either event that his or her cumulative grade

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1		average was or is in the upper 1/4 of the high school
2		class;
3		(3) that he or she has superior capacity to profit by a
4		higher education; and
5		(4) that he or she agrees to teach in Illinois schools
6		in accordance with subsection (b).
7		No rule or regulation promulgated by the State Board of
8		Education prior to the effective date of this amendatory Act
9		of 1993 pursuant to the exercise of any right, power, duty,
10		responsibility or matter of pending business transferred from
11		the State Board of Education to the Commission under this
12		Section shall be affected thereby, and all such rules and
13		regulations shall become the rules and regulations of the
14		Commission until modified or changed by the Commission in
15		accordance with law.
16		If in any year the number of qualified applicants exceeds
17		the number of scholarships to be awarded, the Commission shall
18		give priority in awarding scholarships to students in
19		financial need. The Commission shall consider factors such as
20		the applicant's family income, the size of the applicant's
21		family and the number of other children in the applicant's
22		family attending college in determining the financial need of
23		the individual.
24		Unless otherwise indicated, these scholarships shall be
25		good for a period of up to 4 years while the recipient is
26		enrolled for residence credit at a public or private

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1		university or college or at a community college. The
2		scholarship shall cover tuition, fees and a stipend of $1,500
3		per year. For purposes of calculating scholarship awards for
4		recipients attending private universities or colleges, tuition
5		and fees for students at private colleges and universities
6		shall not exceed the average tuition and fees for students at
7		4-year public colleges and universities for the academic year
8		in which the scholarship is made.
9		(b) Upon graduation from or termination of enrollment in a
10		teacher education program, any person who accepted a
11		scholarship under the undergraduate scholarship program
12		continued by this Section, including persons whose graduation
13		or termination of enrollment occurred prior to the effective
14		date of this amendatory Act of 1993, shall teach in any school
15		in this State for at least 4 of the 7 years immediately
16		following his or her graduation or termination. If the
17		recipient spends up to 4 years in military service before or
18		after he or she graduates, the period of military service
19		shall be excluded from the computation of that 7 year period. A
20		recipient who is enrolled full-time in an academic program
21		leading to a graduate degree in education shall have the
22		period of graduate study excluded from the computation of that
23		7 year period.
24		Any person who fails to fulfill the teaching requirement
25		shall pay to the Commission an amount equal to one-fourth of
26		the scholarship received for each unfulfilled year of the

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1		4-year teaching requirement, together with interest at 8% per
2		year on that amount. However, this obligation to repay does
3		not apply when the failure to fulfill the teaching requirement
4		results from involuntarily leaving the profession due to a
5		decrease in the number of teachers employed by the school
6		board or a discontinuation of a type of teaching service under
7		Section 24-12 of the School Code or from the death or
8		adjudication as incompetent of the person holding the
9		scholarship. No claim for repayment may be filed against the
10		estate of such a decedent or incompetent.
11		Each person applying for such a scholarship shall be
12		provided with a copy of this subsection at the time he or she
13		applies for the benefits of such scholarship.
14		(c) This Section is substantially the same as Sections
15		30-14.5 and 30-14.6 of the School Code, which are repealed by
16		this amendatory Act of 1993, and shall be construed as a
17		continuation of the teacher training undergraduate scholarship
18		program established by that prior law, and not as a new or
19		different teacher training undergraduate scholarship program.
20		The State Board of Education shall transfer to the Commission,
21		as the successor to the State Board of Education for all
22		purposes of administering and implementing the provisions of
23		this Section, all books, accounts, records, papers, documents,
24		contracts, agreements, and pending business in any way
25		relating to the teacher training undergraduate scholarship
26		program continued under this Section, and all scholarships at

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1		any time awarded under that program by, and all applications
2		for any such scholarship at any time made to, the State Board
3		of Education shall be unaffected by the transfer to the
4		Commission of all responsibility for the administration and
5		implementation of the teacher training undergraduate
6		scholarship program continued under this Section. The State
7		Board of Education shall furnish to the Commission such other
8		information as the Commission may request to assist it in
9		administering this Section.
10		(Source: P.A. 88-228.)
11		(110 ILCS 947/65.110)
12		Sec. 65.110. Post-Master of Social Work School Social Work
13		Professional Educator License scholarship.
14		(a) Subject to appropriation, beginning with awards for
15		the 2022-2023 academic year, the Commission shall award
16		annually up to 250 Post-Master of Social Work School Social
17		Work Professional Educator License scholarships to a person
18		who:
19		(1) holds a valid Illinois-licensed clinical social
20		work license or social work license;
21		(2) has obtained a master's degree in social work from
22		an approved program;
23		(3) is a United States citizen or eligible noncitizen;
24		and
25		(4) submits an application to the Commission for such

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1		scholarship and agrees to take courses to obtain an
2		Illinois Professional Educator License with an endorsement
3		in School Social Work.
4		(b) If an appropriation for this Section for a given
5		fiscal year is insufficient to provide scholarships to all
6		qualified applicants, the Commission shall allocate the
7		appropriation in accordance with this subsection (b). If funds
8		are insufficient to provide all qualified applicants with a
9		scholarship as authorized by this Section, the Commission
10		shall allocate the available scholarship funds for that fiscal
11		year to qualified applicants who submit a complete application
12		on or before a date specified by the Commission, based on the
13		following order of priority:
14		(1) firstly, to students who received a scholarship
15		under this Section in the prior academic year and who
16		remain eligible for a scholarship under this Section;
17		(2) secondly, to new, qualified applicants who are
18		members of a racial minority, as defined in subsection
19		(c); and
20		(3) finally, to other new, qualified applicants in
21		accordance with this Section.
22		(c) Scholarships awarded under this Section shall be
23		issued pursuant to rules adopted by the Commission. In
24		awarding scholarships, the Commission shall give priority to
25		those applicants who are members of a racial minority. Racial
26		minorities are underrepresented as school social workers in

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1		elementary and secondary schools in this State, and the
2		General Assembly finds that it is in the interest of this State
3		to provide them with priority consideration for programs that
4		encourage their participation in this field and thereby foster
5		a profession that is more reflective of the diversity of
6		Illinois students and the parents they will serve. A more
7		reflective workforce in school social work allows improved
8		outcomes for students and a better utilization of services.
9		Therefore, the Commission shall give priority to those
10		applicants who are members of a racial minority. In this
11		subsection (c), "racial minority" means a person who is a
12		citizen of the United States or a lawful permanent resident
13		noncitizen alien of the United States and who is:
14		(1) Black (a person having origins in any of the black
15		racial groups in Africa);
16		(2) Hispanic (a person of Spanish or Portuguese
17		culture with origins in Mexico, South or Central America,
18		or the Caribbean Islands, regardless of race);
19		(3) Asian American (a person having origins in any of
20		the original peoples of the Far East, Southeast Asia, the
21		Indian Subcontinent, or the Pacific Islands); or
22		(4) American Indian or Alaskan Native (a person having
23		origins in any of the original peoples of North America).
24		(d) Each scholarship shall be applied to the payment of
25		tuition and mandatory fees at the University of Illinois,
26		Southern Illinois University, Chicago State University,

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1		Eastern Illinois University, Governors State University,
2		Illinois State University, Northeastern Illinois University,
3		Northern Illinois University, and Western Illinois University.
4		Each scholarship may be applied to pay tuition and mandatory
5		fees required to obtain an Illinois Professional Educator
6		License with an endorsement in School Social Work.
7		(e) The Commission shall make tuition and fee payments
8		directly to the qualified institution of higher learning that
9		the applicant attends.
10		(f) Any person who has accepted a scholarship under this
11		Section must, within one year after graduation or termination
12		of enrollment in a Post-Master of Social Work Professional
13		Education License with an endorsement in School Social Work
14		program, begin working as a school social worker at a public or
15		nonpublic not-for-profit preschool, elementary school, or
16		secondary school located in this State for at least 2 of the 5
17		years immediately following that graduation or termination,
18		excluding, however, from the computation of that 5-year
19		period: (i) any time up to 3 years spent in the military
20		service, whether such service occurs before or after the
21		person graduates; (ii) the time that person is a person with a
22		temporary total disability for a period of time not to exceed 3
23		years, as established by the sworn affidavit of a qualified
24		physician; and (iii) the time that person is seeking and
25		unable to find full-time employment as a school social worker
26		at a State public or nonpublic not-for-profit preschool,

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1		elementary school, or secondary school.
2		(g) If a recipient of a scholarship under this Section
3		fails to fulfill the work obligation set forth in subsection
4		(f), the Commission shall require the recipient to repay the
5		amount of the scholarships received, prorated according to the
6		fraction of the obligation not completed, at a rate of
7		interest equal to 5%, and, if applicable, reasonable
8		collection fees. The Commission is authorized to establish
9		rules relating to its collection activities for repayment of
10		scholarships under this Section. All repayments collected
11		under this Section shall be forwarded to the State Comptroller
12		for deposit into this State's General Revenue Fund.
13		A recipient of a scholarship under this Section is not
14		considered to be in violation of the failure to fulfill the
15		work obligation under subsection (f) if the recipient (i)
16		enrolls on a full-time basis as a graduate student in a course
17		of study related to the field of social work at a qualified
18		Illinois institution of higher learning; (ii) is serving, not
19		in excess of 3 years, as a member of the armed services of the
20		United States; (iii) is a person with a temporary total
21		disability for a period of time not to exceed 3 years, as
22		established by the sworn affidavit of a qualified physician;
23		(iv) is seeking and unable to find full-time employment as a
24		school social worker at an Illinois public or nonpublic
25		not-for-profit preschool, elementary school, or secondary
26		school that satisfies the criteria set forth in subsection (f)

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1		and is able to provide evidence of that fact; or (v) becomes a
2		person with a permanent total disability, as established by
3		the sworn affidavit of a qualified physician.
4		(Source: P.A. 102-621, eff. 1-1-22.)
5		Section 75. The Mental Health Graduate Education
6		Scholarship Act is amended by changing Section 20 as follows:
7		(110 ILCS 952/20)
8		Sec. 20. Scholarships.
9		(a) Beginning with the fall term of the 2009-2010 academic
10		year, the Department, in accordance with rules adopted by it
11		for this program, shall provide scholarships to individuals
12		selected from among those applicants who qualify for
13		consideration by showing all of the following:
14		(1) That the individual has been a resident of this
15		State for at least one year prior to application and is a
16		citizen or a lawful permanent resident noncitizen alien of
17		the United States.
18		(2) That the individual enrolled in or accepted into a
19		mental health graduate program at an approved institution.
20		(3) That the individual agrees to meet the mental
21		health employment obligation.
22		(b) If in any year the number of qualified applicants
23		exceeds the number of scholarships to be awarded, the
24		Department shall, in consultation with the Advisory Council,

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1		consider the following factors in granting priority in
2		awarding scholarships:
3		(1) Financial need, as shown on a standardized
4		financial needs assessment form used by an approved
5		institution.
6		(2) A student's merit, as shown through his or her
7		grade point average, class rank, and other academic and
8		extracurricular activities.
9		The Department may add to and further define these merit
10		criteria by rule.
11		(c) Unless otherwise indicated, scholarships shall be
12		awarded to recipients at approved institutions for a period of
13		up to 2 years if the recipient is enrolled in a master's degree
14		program and up to 4 years if the recipient is enrolled in a
15		doctoral degree program.
16		(Source: P.A. 96-672, eff. 8-25-09.)
17		Section 80. The Nursing Education Scholarship Law is
18		amended by changing Sections 5 and 6.5 as follows:
19		(110 ILCS 975/5) (from Ch. 144, par. 2755)
20		Sec. 5. Nursing education scholarships. Beginning with the
21		fall term of the 2004-2005 academic year, the Department, in
22		accordance with rules and regulations promulgated by it for
23		this program, shall provide scholarships to individuals
24		selected from among those applicants who qualify for

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1		consideration by showing:
2		(1) that he or she has been a resident of this State
3		for at least one year prior to application, and is a
4		citizen or a lawful permanent resident noncitizen alien of
5		the United States;
6		(2) that he or she is enrolled in or accepted for
7		admission to an associate degree in nursing program,
8		hospital-based diploma in nursing program, baccalaureate
9		degree in nursing program, graduate degree in nursing
10		program, or practical nursing program at an approved
11		institution; and
12		(3) that he or she agrees to meet the nursing
13		employment obligation.
14		If in any year the number of qualified applicants exceeds
15		the number of scholarships to be awarded, the Department
16		shall, in consultation with the Illinois Nursing Workforce
17		Center Advisory Board, consider the following factors in
18		granting priority in awarding scholarships:
19		(A) Financial need, as shown on a standardized
20		financial needs assessment form used by an approved
21		institution, of students who will pursue their
22		education on a full-time or close to full-time basis
23		and who already have a certificate in practical
24		nursing, a diploma in nursing, or an associate degree
25		in nursing and are pursuing a higher degree.
26		(B) A student's status as a registered nurse who

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1		is pursuing a graduate degree in nursing to pursue
2		employment in an approved institution that educates
3		licensed practical nurses and that educates registered
4		nurses in undergraduate and graduate nursing programs.
5		(C) A student's merit, as shown through his or her
6		grade point average, class rank, and other academic
7		and extracurricular activities. The Department may add
8		to and further define these merit criteria by rule.
9		Unless otherwise indicated, scholarships shall be awarded
10		to recipients at approved institutions for a period of up to 2
11		years if the recipient is enrolled in an associate degree in
12		nursing program, up to 3 years if the recipient is enrolled in
13		a hospital-based diploma in nursing program, up to 4 years if
14		the recipient is enrolled in a baccalaureate degree in nursing
15		program, up to 5 years if the recipient is enrolled in a
16		graduate degree in nursing program, and up to one year if the
17		recipient is enrolled in a certificate in practical nursing
18		program. At least 40% of the scholarships awarded shall be for
19		recipients who are pursuing baccalaureate degrees in nursing,
20		30% of the scholarships awarded shall be for recipients who
21		are pursuing associate degrees in nursing or a diploma in
22		nursing, 10% of the scholarships awarded shall be for
23		recipients who are pursuing a certificate in practical
24		nursing, and 20% of the scholarships awarded shall be for
25		recipients who are pursuing a graduate degree in nursing.
26		Beginning with the fall term of the 2021-2022 academic

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1		year and continuing through the 2024-2025 academic year,
2		subject to appropriation from the Hospital Licensure Fund, in
3		addition to any other funds available to the Department for
4		such scholarships, the Department may award a total of
5		$500,000 annually in scholarships under this Section.
6		(Source: P.A. 102-641, eff. 8-27-21.)
7		(110 ILCS 975/6.5)
8		Sec. 6.5. Nurse educator scholarships.
9		(a) Beginning with the fall term of the 2009-2010 academic
10		year, the Department shall provide scholarships to individuals
11		selected from among those applicants who qualify for
12		consideration by showing the following:
13		(1) that he or she has been a resident of this State
14		for at least one year prior to application and is a citizen
15		or a lawful permanent resident noncitizen alien of the
16		United States;
17		(2) that he or she is enrolled in or accepted for
18		admission to a graduate degree in nursing program at an
19		approved institution; and
20		(3) that he or she agrees to meet the nurse educator
21		employment obligation.
22		(b) If in any year the number of qualified applicants
23		exceeds the number of scholarships to be awarded under this
24		Section, the Department shall, in consultation with the
25		Illinois Nursing Workforce Center Advisory Board, consider the

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1		following factors in granting priority in awarding
2		scholarships:
3		(1) Financial need, as shown on a standardized
4		financial needs assessment form used by an approved
5		institution, of students who will pursue their education
6		on a full-time or close to full-time basis and who already
7		have a diploma in nursing and are pursuing a higher
8		degree.
9		(2) A student's status as a registered nurse who is
10		pursuing a graduate degree in nursing to pursue employment
11		in an approved institution that educates licensed
12		practical nurses and that educates registered nurses in
13		undergraduate and graduate nursing programs.
14		(3) A student's merit, as shown through his or her
15		grade point average, class rank, experience as a nurse,
16		including supervisory experience, experience as a nurse in
17		the United States military, and other academic and
18		extracurricular activities.
19		(c) Unless otherwise indicated, scholarships under this
20		Section shall be awarded to recipients at approved
21		institutions for a period of up to 3 years.
22		(d) Within 12 months after graduation from a graduate
23		degree in nursing program for nurse educators, any recipient
24		who accepted a scholarship under this Section shall begin
25		meeting the required nurse educator employment obligation. In
26		order to defer his or her continuous employment obligation, a

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1		recipient must request the deferment in writing from the
2		Department. A recipient shall receive a deferment if he or she
3		notifies the Department, within 30 days after enlisting, that
4		he or she is spending up to 4 years in military service. A
5		recipient shall receive a deferment if he or she notifies the
6		Department, within 30 days after enrolling, that he or she is
7		enrolled in an academic program leading to a graduate degree
8		in nursing. The recipient must begin meeting the required
9		nurse educator employment obligation no later than 6 months
10		after the end of the deferment or deferments.
11		Any person who fails to fulfill the nurse educator
12		employment obligation shall pay to the Department an amount
13		equal to the amount of scholarship funds received per year for
14		each unfulfilled year of the nurse educator employment
15		obligation, together with interest at 7% per year on the
16		unpaid balance. Payment must begin within 6 months following
17		the date of the occurrence initiating the repayment. All
18		repayments must be completed within 6 years from the date of
19		the occurrence initiating the repayment. However, this
20		repayment obligation may be deferred and re-evaluated every 6
21		months when the failure to fulfill the nurse educator
22		employment obligation results from involuntarily leaving the
23		profession due to a decrease in the number of nurses employed
24		in this State or when the failure to fulfill the nurse educator
25		employment obligation results from total and permanent
26		disability. The repayment obligation shall be excused if the

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1		failure to fulfill the nurse educator employment obligation
2		results from the death or adjudication as incompetent of the
3		person holding the scholarship. No claim for repayment may be
4		filed against the estate of such a decedent or incompetent.
5		The Department may allow a nurse educator employment
6		obligation fulfillment alternative if the nurse educator
7		scholarship recipient is unsuccessful in finding work as a
8		nurse educator. The Department shall maintain a database of
9		all available nurse educator positions in this State.
10		(e) Each person applying for a scholarship under this
11		Section must be provided with a copy of this Section at the
12		time of application for the benefits of this scholarship.
13		(f) Rulemaking authority to implement this amendatory Act
14		of the 96th General Assembly, if any, is conditioned on the
15		rules being adopted in accordance with all provisions of the
16		Illinois Administrative Procedure Act and all rules and
17		procedures of the Joint Committee on Administrative Rules; any
18		purported rule not so adopted, for whatever reason, is
19		unauthorized.
20		(Source: P.A. 100-513, eff. 1-1-18.)
21		Section 85. The Residential Mortgage License Act of 1987
22		is amended by changing Section 1-4 as follows:
23		(205 ILCS 635/1-4)
24		Sec. 1-4. Definitions. The following words and phrases

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1		have the meanings given to them in this Section:
2		(a) "Residential real property" or "residential real
3		estate" shall mean any real property located in Illinois,
4		upon which is constructed or intended to be constructed a
5		dwelling. Those terms include a manufactured home as
6		defined in subdivision (53) of Section 9-102 of the
7		Uniform Commercial Code which is real property as defined
8		in Section 5-35 of the Conveyance and Encumbrance of
9		Manufactured Homes as Real Property and Severance Act.
10		(b) "Making a residential mortgage loan" or "funding a
11		residential mortgage loan" shall mean for compensation or
12		gain, either directly or indirectly, advancing funds or
13		making a commitment to advance funds to a loan applicant
14		for a residential mortgage loan.
15		(c) "Soliciting, processing, placing, or negotiating a
16		residential mortgage loan" shall mean for compensation or
17		gain, either directly or indirectly, accepting or offering
18		to accept an application for a residential mortgage loan,
19		assisting or offering to assist in the processing of an
20		application for a residential mortgage loan on behalf of a
21		borrower, or negotiating or offering to negotiate the
22		terms or conditions of a residential mortgage loan with a
23		lender on behalf of a borrower including, but not limited
24		to, the submission of credit packages for the approval of
25		lenders, the preparation of residential mortgage loan
26		closing documents, including a closing in the name of a

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1		broker.
2		(d) "Exempt person or entity" shall mean the
3		following:
4		(1) (i) Any banking organization or foreign
5		banking corporation licensed by the Illinois
6		Commissioner of Banks and Real Estate or the United
7		States Comptroller of the Currency to transact
8		business in this State; (ii) any national bank,
9		federally chartered savings and loan association,
10		federal savings bank, federal credit union; (iii)
11		(blank); (iv) any bank, savings and loan association,
12		savings bank, or credit union organized under the laws
13		of this or any other state; (v) any Illinois Consumer
14		Installment Loan Act licensee; (vi) any insurance
15		company authorized to transact business in this State;
16		(vii) any entity engaged solely in commercial mortgage
17		lending; (viii) any service corporation of a savings
18		and loan association or savings bank organized under
19		the laws of this State or the service corporation of a
20		federally chartered savings and loan association or
21		savings bank having its principal place of business in
22		this State, other than a service corporation licensed
23		or entitled to reciprocity under the Real Estate
24		License Act of 2000; or (ix) any first tier subsidiary
25		of a bank, the charter of which is issued under the
26		Illinois Banking Act by the Illinois Commissioner of

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1		Banks and Real Estate, or the first tier subsidiary of
2		a bank chartered by the United States Comptroller of
3		the Currency and that has its principal place of
4		business in this State, provided that the first tier
5		subsidiary is regularly examined by the Illinois
6		Commissioner of Banks and Real Estate or the
7		Comptroller of the Currency, or a consumer compliance
8		examination is regularly conducted by the Federal
9		Reserve Board.
10		(1.5) Any employee of a person or entity mentioned
11		in item (1) of this subsection, when acting for such
12		person or entity, or any registered mortgage loan
13		originator when acting for an entity described in
14		subsection (tt) of this Section.
15		(1.8) Any person or entity that does not originate
16		mortgage loans in the ordinary course of business, but
17		makes or acquires residential mortgage loans with his
18		or her own funds for his or her or its own investment
19		without intent to make, acquire, or resell more than 3
20		residential mortgage loans in any one calendar year.
21		(2) (Blank).
22		(2.1) A bona fide nonprofit organization.
23		(2.2) An employee of a bona fide nonprofit
24		organization when acting on behalf of that
25		organization.
26		(3) Any person employed by a licensee to assist in

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1		the performance of the residential mortgage licensee's
2		activities regulated by this Act who is compensated in
3		any manner by only one licensee.
4		(4) (Blank).
5		(5) Any individual, corporation, partnership, or
6		other entity that originates, services, or brokers
7		residential mortgage loans, as these activities are
8		defined in this Act, and who or which receives no
9		compensation for those activities, subject to the
10		Commissioner's regulations and the federal Secure and
11		Fair Enforcement for Mortgage Licensing Act of 2008
12		and the rules promulgated under that Act with regard
13		to the nature and amount of compensation.
14		(6) (Blank).
15		(7) Any entity engaged solely in providing loan
16		processing services through the sponsoring of
17		individuals acting pursuant to subsection (d) of
18		Section 7-1A of this Act.
19		(e) "Licensee" or "residential mortgage licensee"
20		shall mean a person, partnership, association,
21		corporation, or any other entity who or which is licensed
22		pursuant to this Act to engage in the activities regulated
23		by this Act.
24		(f) "Mortgage loan" "residential mortgage loan" or
25		"home mortgage loan" shall mean any loan primarily for
26		personal, family, or household use that is secured by a

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1		mortgage, deed of trust, or other equivalent consensual
2		security interest on a dwelling as defined in Section
3		103(v) of the federal Truth in Lending Act, or residential
4		real estate upon which is constructed or intended to be
5		constructed a dwelling.
6		(g) "Lender" shall mean any person, partnership,
7		association, corporation, or any other entity who either
8		lends or invests money in residential mortgage loans.
9		(h) "Ultimate equitable owner" shall mean a person
10		who, directly or indirectly, owns or controls an ownership
11		interest in a corporation, foreign corporation,
12		non-domestic alien business organization, trust, or any
13		other form of business organization regardless of whether
14		the person owns or controls the ownership interest through
15		one or more persons or one or more proxies, powers of
16		attorney, nominees, corporations, associations,
17		partnerships, trusts, joint stock companies, or other
18		entities or devices, or any combination thereof.
19		(i) "Residential mortgage financing transaction" shall
20		mean the negotiation, acquisition, sale, or arrangement
21		for or the offer to negotiate, acquire, sell, or arrange
22		for, a residential mortgage loan or residential mortgage
23		loan commitment.
24		(j) "Personal residence address" shall mean a street
25		address and shall not include a post office box number.
26		(k) "Residential mortgage loan commitment" shall mean

SB3865 Engrossed - 145 - LRB102 24242 RJF 33473 b
1		a contract for residential mortgage loan financing.
2		(l) "Party to a residential mortgage financing
3		transaction" shall mean a borrower, lender, or loan broker
4		in a residential mortgage financing transaction.
5		(m) "Payments" shall mean payment of all or any of the
6		following: principal, interest and escrow reserves for
7		taxes, insurance and other related reserves, and
8		reimbursement for lender advances.
9		(n) "Commissioner" shall mean the Commissioner of
10		Banks and Real Estate, except that, beginning on April 6,
11		2009 (the effective date of Public Act 95-1047), all
12		references in this Act to the Commissioner of Banks and
13		Real Estate are deemed, in appropriate contexts, to be
14		references to the Secretary of Financial and Professional
15		Regulation, or his or her designee, including the Director
16		of the Division of Banking of the Department of Financial
17		and Professional Regulation.
18		(n-1) "Director" shall mean the Director of the
19		Division of Banking of the Department of Financial and
20		Professional Regulation, except that, beginning on July
21		31, 2009 (the effective date of Public Act 96-112), all
22		references in this Act to the Director are deemed, in
23		appropriate contexts, to be the Secretary of Financial and
24		Professional Regulation, or his or her designee, including
25		the Director of the Division of Banking of the Department
26		of Financial and Professional Regulation.

SB3865 Engrossed - 146 - LRB102 24242 RJF 33473 b
1		(o) "Loan brokering", "brokering", or "brokerage
2		service" shall mean the act of helping to obtain from
3		another entity, for a borrower, a loan secured by
4		residential real estate situated in Illinois or assisting
5		a borrower in obtaining a loan secured by residential real
6		estate situated in Illinois in return for consideration to
7		be paid by either the borrower or the lender including,
8		but not limited to, contracting for the delivery of
9		residential mortgage loans to a third party lender and
10		soliciting, processing, placing, or negotiating
11		residential mortgage loans.
12		(p) "Loan broker" or "broker" shall mean a person,
13		partnership, association, corporation, or limited
14		liability company, other than those persons, partnerships,
15		associations, corporations, or limited liability companies
16		exempted from licensing pursuant to Section 1-4,
17		subsection (d), of this Act, who performs the activities
18		described in subsections (c), (o), and (yy) of this
19		Section.
20		(q) "Servicing" shall mean the collection or
21		remittance for or the right or obligation to collect or
22		remit for any lender, noteowner, noteholder, or for a
23		licensee's own account, of payments, interests, principal,
24		and trust items such as hazard insurance and taxes on a
25		residential mortgage loan in accordance with the terms of
26		the residential mortgage loan; and includes loan payment

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1		follow-up, delinquency loan follow-up, loan analysis and
2		any notifications to the borrower that are necessary to
3		enable the borrower to keep the loan current and in good
4		standing. "Servicing" includes management of third-party
5		entities acting on behalf of a residential mortgage
6		licensee for the collection of delinquent payments and the
7		use by such third-party entities of said licensee's
8		servicing records or information, including their use in
9		foreclosure.
10		(r) "Full service office" shall mean an office,
11		provided by the licensee and not subleased from the
12		licensee's employees, and staff in Illinois reasonably
13		adequate to handle efficiently communications, questions,
14		and other matters relating to any application for, or an
15		existing home mortgage secured by residential real estate
16		situated in Illinois with respect to which the licensee is
17		brokering, funding originating, purchasing, or servicing.
18		The management and operation of each full service office
19		must include observance of good business practices such as
20		proper signage; adequate, organized, and accurate books
21		and records; ample phone lines, hours of business, staff
22		training and supervision, and provision for a mechanism to
23		resolve consumer inquiries, complaints, and problems. The
24		Commissioner shall issue regulations with regard to these
25		requirements and shall include an evaluation of compliance
26		with this Section in his or her periodic examination of

SB3865 Engrossed - 148 - LRB102 24242 RJF 33473 b
1		each licensee.
2		(s) "Purchasing" shall mean the purchase of
3		conventional or government-insured mortgage loans secured
4		by residential real estate situated in Illinois from
5		either the lender or from the secondary market.
6		(t) "Borrower" shall mean the person or persons who
7		seek the services of a loan broker, originator, or lender.
8		(u) "Originating" shall mean the issuing of
9		commitments for and funding of residential mortgage loans.
10		(v) "Loan brokerage agreement" shall mean a written
11		agreement in which a broker or loan broker agrees to do
12		either of the following:
13		(1) obtain a residential mortgage loan for the
14		borrower or assist the borrower in obtaining a
15		residential mortgage loan; or
16		(2) consider making a residential mortgage loan to
17		the borrower.
18		(w) "Advertisement" shall mean the attempt by
19		publication, dissemination, or circulation to induce,
20		directly or indirectly, any person to enter into a
21		residential mortgage loan agreement or residential
22		mortgage loan brokerage agreement relative to a mortgage
23		secured by residential real estate situated in Illinois.
24		(x) (Blank).
25		(y) "Government-insured mortgage loan" shall mean any
26		mortgage loan made on the security of residential real

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1		estate insured by the Department of Housing and Urban
2		Development or Farmers Home Loan Administration, or
3		guaranteed by the Veterans Administration.
4		(z) "Annual audit" shall mean a certified audit of the
5		licensee's books and records and systems of internal
6		control performed by a certified public accountant in
7		accordance with generally accepted accounting principles
8		and generally accepted auditing standards.
9		(aa) "Financial institution" shall mean a savings and
10		loan association, savings bank, credit union, or a bank
11		organized under the laws of Illinois or a savings and loan
12		association, savings bank, credit union or a bank
13		organized under the laws of the United States and
14		headquartered in Illinois.
15		(bb) "Escrow agent" shall mean a third party,
16		individual or entity charged with the fiduciary obligation
17		for holding escrow funds on a residential mortgage loan
18		pending final payout of those funds in accordance with the
19		terms of the residential mortgage loan.
20		(cc) "Net worth" shall have the meaning ascribed
21		thereto in Section 3-5 of this Act.
22		(dd) "Affiliate" shall mean:
23		(1) any entity that directly controls or is
24		controlled by the licensee and any other company that
25		is directly affecting activities regulated by this Act
26		that is controlled by the company that controls the

SB3865 Engrossed - 150 - LRB102 24242 RJF 33473 b
1		licensee;
2		(2) any entity:
3		(A) that is controlled, directly or
4		indirectly, by a trust or otherwise, by or for the
5		benefit of shareholders who beneficially or
6		otherwise control, directly or indirectly, by
7		trust or otherwise, the licensee or any company
8		that controls the licensee; or
9		(B) a majority of the directors or trustees of
10		which constitute a majority of the persons holding
11		any such office with the licensee or any company
12		that controls the licensee;
13		(3) any company, including a real estate
14		investment trust, that is sponsored and advised on a
15		contractual basis by the licensee or any subsidiary or
16		affiliate of the licensee.
17		(ee) "First tier subsidiary" shall be defined by
18		regulation incorporating the comparable definitions used
19		by the Office of the Comptroller of the Currency and the
20		Illinois Commissioner of Banks and Real Estate.
21		(ff) "Gross delinquency rate" means the quotient
22		determined by dividing (1) the sum of (i) the number of
23		government-insured residential mortgage loans funded or
24		purchased by a licensee in the preceding calendar year
25		that are delinquent and (ii) the number of conventional
26		residential mortgage loans funded or purchased by the

SB3865 Engrossed - 151 - LRB102 24242 RJF 33473 b
1		licensee in the preceding calendar year that are
2		delinquent by (2) the sum of (i) the number of
3		government-insured residential mortgage loans funded or
4		purchased by the licensee in the preceding calendar year
5		and (ii) the number of conventional residential mortgage
6		loans funded or purchased by the licensee in the preceding
7		calendar year.
8		(gg) "Delinquency rate factor" means the factor set by
9		rule of the Commissioner that is multiplied by the average
10		gross delinquency rate of licensees, determined annually
11		for the immediately preceding calendar year, for the
12		purpose of determining which licensees shall be examined
13		by the Commissioner pursuant to subsection (b) of Section
14		4-8 of this Act.
15		(hh) (Blank).
16		(ii) "Confidential supervisory information" means any
17		report of examination, visitation, or investigation
18		prepared by the Commissioner under this Act, any report of
19		examination visitation, or investigation prepared by the
20		state regulatory authority of another state that examines
21		a licensee, any document or record prepared or obtained in
22		connection with or relating to any examination,
23		visitation, or investigation, and any record prepared or
24		obtained by the Commissioner to the extent that the record
25		summarizes or contains information derived from any
26		report, document, or record described in this subsection.

SB3865 Engrossed - 152 - LRB102 24242 RJF 33473 b
1		"Confidential supervisory information" does not include
2		any information or record routinely prepared by a licensee
3		and maintained in the ordinary course of business or any
4		information or record that is required to be made publicly
5		available pursuant to State or federal law or rule.
6		(jj) "Mortgage loan originator" means an individual
7		who for compensation or gain or in the expectation of
8		compensation or gain:
9		(i) takes a residential mortgage loan application;
10		or
11		(ii) offers or negotiates terms of a residential
12		mortgage loan.
13		"Mortgage loan originator" includes an individual
14		engaged in loan modification activities as defined in
15		subsection (yy) of this Section. A mortgage loan
16		originator engaged in loan modification activities shall
17		report those activities to the Department of Financial and
18		Professional Regulation in the manner provided by the
19		Department; however, the Department shall not impose a fee
20		for reporting, nor require any additional qualifications
21		to engage in those activities beyond those provided
22		pursuant to this Act for mortgage loan originators.
23		"Mortgage loan originator" does not include an
24		individual engaged solely as a loan processor or
25		underwriter except as otherwise provided in subsection (d)
26		of Section 7-1A of this Act.

SB3865 Engrossed - 153 - LRB102 24242 RJF 33473 b
1		"Mortgage loan originator" does not include a person
2		or entity that only performs real estate brokerage
3		activities and is licensed in accordance with the Real
4		Estate License Act of 2000, unless the person or entity is
5		compensated by a lender, a mortgage broker, or other
6		mortgage loan originator, or by any agent of that lender,
7		mortgage broker, or other mortgage loan originator.
8		"Mortgage loan originator" does not include a person
9		or entity solely involved in extensions of credit relating
10		to timeshare plans, as that term is defined in Section
11		101(53D) of Title 11, United States Code.
12		(kk) "Depository institution" has the same meaning as
13		in Section 3 of the Federal Deposit Insurance Act, and
14		includes any credit union.
15		(ll) "Dwelling" means a residential structure or
16		mobile home which contains one to 4 family housing units,
17		or individual units of condominiums or cooperatives.
18		(mm) "Immediate family member" means a spouse, child,
19		sibling, parent, grandparent, or grandchild, and includes
20		step-parents, step-children, step-siblings, or adoptive
21		relationships.
22		(nn) "Individual" means a natural person.
23		(oo) "Loan processor or underwriter" means an
24		individual who performs clerical or support duties as an
25		employee at the direction of and subject to the
26		supervision and instruction of a person licensed, or

SB3865 Engrossed - 154 - LRB102 24242 RJF 33473 b
1		exempt from licensing, under this Act. "Clerical or
2		support duties" includes subsequent to the receipt of an
3		application:
4		(i) the receipt, collection, distribution, and
5		analysis of information common for the processing or
6		underwriting of a residential mortgage loan; and
7		(ii) communicating with a consumer to obtain the
8		information necessary for the processing or
9		underwriting of a loan, to the extent that the
10		communication does not include offering or negotiating
11		loan rates or terms, or counseling consumers about
12		residential mortgage loan rates or terms. An
13		individual engaging solely in loan processor or
14		underwriter activities shall not represent to the
15		public, through advertising or other means of
16		communicating or providing information, including the
17		use of business cards, stationery, brochures, signs,
18		rate lists, or other promotional items, that the
19		individual can or will perform any of the activities
20		of a mortgage loan originator.
21		(pp) "Nationwide Multistate Licensing System and
22		Registry" means a mortgage licensing system developed and
23		maintained by the Conference of State Bank Supervisors and
24		the American Association of Residential Mortgage
25		Regulators for the licensing and registration of licensed
26		mortgage loan originators.

SB3865 Engrossed - 155 - LRB102 24242 RJF 33473 b
1		(qq) "Nontraditional mortgage product" means any
2		mortgage product other than a 30-year fixed rate mortgage.
3		(rr) "Person" means a natural person, corporation,
4		company, limited liability company, partnership, or
5		association.
6		(ss) "Real estate brokerage activity" means any
7		activity that involves offering or providing real estate
8		brokerage services to the public, including:
9		(1) acting as a real estate agent or real estate
10		broker for a buyer, seller, lessor, or lessee of real
11		property;
12		(2) bringing together parties interested in the
13		sale, purchase, lease, rental, or exchange of real
14		property;
15		(3) negotiating, on behalf of any party, any
16		portion of a contract relating to the sale, purchase,
17		lease, rental, or exchange of real property, other
18		than in connection with providing financing with
19		respect to any such transaction;
20		(4) engaging in any activity for which a person
21		engaged in the activity is required to be registered
22		or licensed as a real estate agent or real estate
23		broker under any applicable law; or
24		(5) offering to engage in any activity, or act in
25		any capacity, described in this subsection (ss).
26		(tt) "Registered mortgage loan originator" means any

SB3865 Engrossed - 156 - LRB102 24242 RJF 33473 b
1		individual that:
2		(1) meets the definition of mortgage loan
3		originator and is an employee of:
4		(A) a depository institution;
5		(B) a subsidiary that is:
6		(i) owned and controlled by a depository
7		institution; and
8		(ii) regulated by a federal banking
9		agency; or
10		(C) an institution regulated by the Farm
11		Credit Administration; and
12		(2) is registered with, and maintains a unique
13		identifier through, the Nationwide Multistate
14		Licensing System and Registry.
15		(uu) "Unique identifier" means a number or other
16		identifier assigned by protocols established by the
17		Nationwide Multistate Licensing System and Registry.
18		(vv) "Residential mortgage license" means a license
19		issued pursuant to Section 1-3, 2-2, or 2-6 of this Act.
20		(ww) "Mortgage loan originator license" means a
21		license issued pursuant to Section 7-1A, 7-3, or 7-6 of
22		this Act.
23		(xx) "Secretary" means the Secretary of the Department
24		of Financial and Professional Regulation, or a person
25		authorized by the Secretary or by this Act to act in the
26		Secretary's stead.

SB3865 Engrossed - 157 - LRB102 24242 RJF 33473 b
1		(yy) "Loan modification" means, for compensation or
2		gain, either directly or indirectly offering or
3		negotiating on behalf of a borrower or homeowner to adjust
4		the terms of a residential mortgage loan in a manner not
5		provided for in the original or previously modified
6		mortgage loan.
7		(zz) "Short sale facilitation" means, for compensation
8		or gain, either directly or indirectly offering or
9		negotiating on behalf of a borrower or homeowner to
10		facilitate the sale of residential real estate subject to
11		one or more residential mortgage loans or debts
12		constituting liens on the property in which the proceeds
13		from selling the residential real estate will fall short
14		of the amount owed and the lien holders are contacted to
15		agree to release their lien on the residential real estate
16		and accept less than the full amount owed on the debt.
17		(aaa) "Bona fide nonprofit organization" means an
18		organization that is described in Section 501(c)(3) of the
19		Internal Revenue Code, is exempt from federal income tax
20		under Section 501(a) of the Internal Revenue Code, does
21		not operate in a commercial context, and does all of the
22		following:
23		(1) Promotes affordable housing or provides home
24		ownership education or similar services.
25		(2) Conducts its activities in a manner that
26		serves public or charitable purposes.

SB3865 Engrossed - 158 - LRB102 24242 RJF 33473 b
1		(3) Receives funding and revenue and charges fees
2		in a manner that does not create an incentive for
3		itself or its employees to act other than in the best
4		interests of its clients.
5		(4) Compensates its employees in a manner that
6		does not create an incentive for its employees to act
7		other than in the best interests of its clients.
8		(5) Provides to, or identifies for, the borrower
9		residential mortgage loans with terms favorable to the
10		borrower and comparable to residential mortgage loans
11		and housing assistance provided under government
12		housing assistance programs.
13		The Commissioner may define by rule and regulation any
14		terms used in this Act for the efficient and clear
15		administration of this Act.
16		(Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18;
17		100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.)
18		Section 90. The Illinois Insurance Code is amended by
19		changing Sections 2, 35A-5, 37, and 58 and the heading of
20		Article III.5 and Sections 60a, 60b, 60c, 60d, 60e, 60f, 60g,
21		60h, 60i, 60j, 63, 86, 87, 88, 103, 104, and 105 and the
22		heading of Article VI and Sections 108, 109, 110, 111, 112,
23		113, 113.1, 114, 115, 116, 117, 118, 119, 120, 123, 123.1,
24		123.3, 123C-8, 126.1, 126.12, 126.25, 131.13, 132.3, 133, 136,
25		141a, 144, 144.1, 146, 148, 154.5, 156, 156.1, 157, 161, 162,

SB3865 Engrossed - 159 - LRB102 24242 RJF 33473 b
1		163, 164, 166, 169, 170, 173.1, 179A-5, and 179E-5 and the
2		heading of Article XII and Sections 180, 185.1, 188, 188.1,
3		197, 201, 223, 241, 292.1, 302.1, 308.1, 309.1, 310.1, 357.29,
4		370, 404, 408, 412, 413, 415, 444, 444.1, 445, 448, 451,
5		531.09, 531.11, 534.5, 543.1, and 1103 as follows:
6		(215 ILCS 5/2) (from Ch. 73, par. 614)
7		Sec. 2. General definitions.
8		In this Code, unless the context otherwise requires,
9		(a) "Director" means the Director of Insurance.
10		(b) "Department" means the Department of Insurance.
11		(c) "State" or "State of the United States" includes the
12		District of Columbia and a territory or possession of the
13		United States.
14		(d) "Country" or "Foreign Country" includes a state,
15		province or political subdivision thereof.
16		(e) "Company" means an insurance or surety company and
17		shall be deemed to include a corporation, company,
18		partnership, association, society, order, individual or
19		aggregation of individuals engaging in or proposing or
20		attempting to engage in any kind of insurance or surety
21		business, including the exchanging of reciprocal or
22		inter-insurance contracts between individuals, partnerships
23		and corporations.
24		(f) "Domestic Company" means a company incorporated or
25		organized under the laws of this State.

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1		(g) "Foreign Company" means a company incorporated or
2		organized under the laws of any state of the United States
3		other than this State.
4		(h) "Non-domestic Alien Company" means a company
5		incorporated or organized under the laws of any country other
6		than the United States.
7		(i) "Mutual Legal Reserve Life Company" means a mutual
8		life company issuing contracts without contingent liability on
9		the policyholder.
10		(j) "Assessment Legal Reserve Life Company" means a life
11		company issuing contracts providing for contingent liability
12		on the policyholder.
13		(k) "Reciprocal" includes Inter-Insurance Exchange.
14		(l) "Person" includes an individual, aggregation of
15		individuals, corporation, association and partnership.
16		(m) Personal pronouns include all genders, the singular
17		includes the plural and the plural includes the singular.
18		(n) "Policy" means an insurance policy or contract and
19		includes certificates of fraternal benefit societies,
20		assessment companies, mutual benefit associations, and burial
21		societies.
22		(o) "Policyholder" means a holder of an insurance policy
23		or contract and includes holders of certificates of fraternal
24		benefit societies, assessment companies, mutual benefit
25		associations, and burial societies.
26		(p) "Articles of Incorporation" means the basic instrument

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1		of an incorporated company and all amendments thereto and
2		includes "Charter," "Articles of Organization," "Articles of
3		Reorganization," "Articles of Association," and "Deed of
4		Settlement."
5		(q) "Officer" when used to refer to an officer of a company
6		includes an attorney-in-fact for a reciprocal or Lloyds.
7		(Source: Laws 1937, p. 696.)
8		(215 ILCS 5/35A-5)
9		Sec. 35A-5. Definitions. As used in this Article, the
10		terms listed in this Section have the meaning given herein.
11		"Adjusted RBC Report" means an RBC Report that has been
12		adjusted by the Director in accordance with subsection (f) of
13		Section 35A-10.
14		"Authorized control level RBC" means the number determined
15		under the risk-based capital formula in accordance with the
16		RBC Instructions.
17		"Company action level RBC" means the product of 2.0 and
18		the insurer's authorized control level RBC.
19		"Corrective Order" means an order issued by the Director
20		in accordance with Article XII 1/2 specifying corrective
21		actions that the Director determines are required.
22		"Domestic insurer" means any insurance company domiciled
23		in this State under Article II, Article III, Article III 1/2,
24		or Article IV or a health organization as defined by this
25		Article, except this shall include only those health

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1		maintenance organizations that are "domestic companies" in
2		accordance with Section 5-3 of the Health Maintenance
3		Organization Act and only those limited health service
4		organizations that are "domestic companies" in accordance with
5		Section 4003 of the Limited Health Service Organization Act.
6		"Fraternal benefit society" means any insurance company
7		licensed under Article XVII of this Code.
8		"Foreign insurer" means any foreign or non-domestic alien
9		insurance company licensed under Article VI that is not
10		domiciled in this State and any health maintenance
11		organization that is not a "domestic company" in accordance
12		with Section 5-3 of the Health Maintenance Organization Act
13		and any limited health service organization that is not a
14		"domestic company" in accordance with Section 4003 of the
15		Limited Health Service Organization Act.
16		"Health organization" means an entity operating under a
17		certificate of authority issued pursuant to the Health
18		Maintenance Organization Act, the Dental Service Plan Act, the
19		Limited Health Service Organization Act, or the Voluntary
20		Health Services Plans Act, unless the entity is otherwise
21		defined as a "life, health, or life and health insurer"
22		pursuant to this Act.
23		"Life, health, or life and health insurer" means an
24		insurance company that has authority to transact the kinds of
25		insurance described in either or both clause (a) or clause (b)
26		of Class 1 of Section 4 or a licensed property and casualty

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1		insurer writing only accident and health insurance.
2		"Mandatory control level RBC" means the product of 0.70
3		and the insurer's authorized control level RBC.
4		"NAIC" means the National Association of Insurance
5		Commissioners.
6		"Negative trend" means, with respect to a life, health, or
7		life and health insurer or a fraternal benefit society, a
8		negative trend over a period of time, as determined in
9		accordance with the trend test calculation included in the
10		Life or Fraternal RBC Instructions.
11		"Property and casualty insurer" means an insurance company
12		that has authority to transact the kinds of insurance in
13		either or both Class 2 or Class 3 of Section 4 or a licensed
14		insurer writing only insurance authorized under clause (c) of
15		Class 1, but does not include monoline mortgage guaranty
16		insurers, financial guaranty insurers, and title insurers.
17		"RBC" means risk-based capital.
18		"RBC Instructions" means the RBC Report including
19		risk-based capital instructions adopted by the NAIC as those
20		instructions may be amended by the NAIC from time to time in
21		accordance with the procedures adopted by the NAIC.
22		"RBC level" means an insurer's company action level RBC,
23		regulatory action level RBC, authorized control level RBC, or
24		mandatory control level RBC.
25		"RBC Plan" means a comprehensive financial plan containing
26		the elements specified in subsection (b) of Section 35A-15.

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1		"RBC Report" means the risk-based capital report required
2		under Section 35A-10.
3		"Receivership" means conservation, rehabilitation, or
4		liquidation under Article XIII.
5		"Regulatory action level RBC" means the product of 1.5 and
6		the insurer's authorized control level RBC.
7		"Revised RBC Plan" means an RBC Plan rejected by the
8		Director and revised by the insurer with or without the
9		Director's recommendations.
10		"Total adjusted capital" means the sum of (1) an insurer's
11		statutory capital and surplus and (2) any other items that the
12		RBC Instructions may provide.
13		(Source: P.A. 98-157, eff. 8-2-13.)
14		(215 ILCS 5/37) (from Ch. 73, par. 649)
15		(Section scheduled to be repealed on January 1, 2027)
16		Sec. 37. Name. The corporate name of any company organized
17		under this Article shall contain the word "Mutual" and shall
18		not be the same as, or deceptively similar to, the name of any
19		domestic company, or of any foreign or non-domestic alien
20		company authorized to transact business in this State.
21		(Source: Laws 1937, p. 696.)
22		(215 ILCS 5/58) (from Ch. 73, par. 670)
23		(Section scheduled to be repealed on January 1, 2027)
24		Sec. 58. Governmental agencies and corporations may be

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1		members. Any government or governmental agency, state or
2		political subdivision thereof, public or private corporation,
3		board, association, estate, trustee or fiduciary in this State
4		or elsewhere, may make application, enter into agreements for
5		and hold policies or contracts in or with, and be a member of,
6		any domestic, foreign or non-domestic alien mutual company
7		subject to the provisions of this Code. Any officer,
8		representative, trustee, receiver or legal representative of
9		any such member or policyholder, shall be recognized as acting
10		for or on its behalf for the purpose of such contract or
11		membership, but shall not be personally liable upon such
12		contract by reason of acting in such representative capacity.
13		(Source: Laws 1937, p. 696.)
14		(215 ILCS 5/Art. III.5 heading)
15		ARTICLE III 1/2. NON-DOMESTIC ALIEN COMPANIES
16		(215 ILCS 5/60a) (from Ch. 73, par. 672a)
17		Sec. 60a. Non-domestic Alien companies; Illinois State of
18		entry.
19		(1) A non-domestic An alien company may use Illinois as a
20		state of entry to transact insurance in the United States by
21		obtaining a certificate of authority pursuant to Section 111
22		and maintaining in this State a deposit of assets in trust in
23		accordance with the provisions of Section 60b.
24		(2) A United States branch of a non-domestic an alien

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1		company that uses Illinois as a state of entry to transact
2		insurance in the United States shall be considered a domestic
3		company, and as such shall be subject to all applicable
4		provisions of this Code. Transactions between the United
5		States branch and the home office of a non-domestic an alien
6		company shall not be subject to the provisions of Section
7		131.20 and subsection (1) of Section 131.20a, but remittances
8		of profits of the United States branch to the home office of a
9		non-domestic an alien company shall be considered dividends
10		subject to the requirements of subsection (2) of Section
11		131.20a.
12		(Source: P.A. 89-97, eff. 7-7-95.)
13		(215 ILCS 5/60b) (from Ch. 73, par. 672b)
14		Sec. 60b. Non-domestic Alien companies; Illinois trusteed
15		assets.
16		(1) A non-domestic An alien company may not use Illinois
17		as a state of entry to transact insurance in the United States
18		unless it maintains in this State a deposit of assets in trust
19		for the benefit of policyholders in the United States, which
20		assets shall be its "Trusteed Assets". The United States
21		branch of a non-domestic an alien company shall maintain
22		Trusteed Assets at least equal to (a) the sum of (i) its
23		minimum capital and surplus, and (ii) the amount of its
24		liabilities to policyholders, net of reinsurance for which
25		credit is allowed pursuant to Article XI, as reflected in its

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1		most recent financial statement on file with the Director,
2		minus (b) the sum of (i) the amount of all of its general state
3		deposits (including all interest accrued and due and payable
4		to the holder of the deposit), (ii) the amount of its special
5		state deposits (including all interest accrued and due and
6		payable to the holder of the deposit), (iii) the amount of its
7		reinsurance recoverable on paid losses (where such reinsurance
8		is the type for which credit would be allowed pursuant to
9		Article XI), (iv) the amounts of its notes and bills
10		receivable, taken for premiums; (v) with respect to a company
11		authorized to write the kinds of insurance specified in
12		Classes 2 and 3 of Section 4 of this Code, the amount of its
13		agents' balances and uncollected premiums; and (vi) the amount
14		of its funds held by or deposited with reinsureds.
15		(2) Only those assets that qualify as authorized
16		investments as provided in Article VIII (and in Sections 131.2
17		and 131.3) shall be included in a non-domestic an alien
18		company's Trusteed Assets.
19		(Source: P.A. 88-45; 89-97, eff. 7-7-95.)
20		(215 ILCS 5/60c) (from Ch. 73, par. 672c)
21		Sec. 60c. Requirements and contents of trust agreement.
22		Trust agreements governing Trusteed Assets required by Section
23		60b shall satisfy the following conditions:
24		(1) Legal title to the Trusteed Assets shall be vested in
25		the trustee or trustees, and their successors lawfully

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1		appointed, in trust for the benefit and security of
2		policyholders of the non-domestic alien company in the United
3		States.
4		(2) The agreement shall provide for substitution of a new
5		trustee or trustees, subject to the Director's approval.
6		(3) All Trusteed Assets shall at all times be maintained
7		as a trust fund separate and distinct from all other assets.
8		(4) The trustee or trustees shall maintain a record at all
9		times sufficient to identify the assets of the trust.
10		(5) Withdrawal of or from the Trusteed Assets shall be
11		made only as provided in Section 60d.
12		(Source: P.A. 85-1373.)
13		(215 ILCS 5/60d) (from Ch. 73, par. 672d)
14		Sec. 60d. Withdrawal of Trusteed Assets. (1) The trust
15		agreement shall provide that no withdrawals of Trusteed Assets
16		shall be made by the non-domestic alien company or permitted
17		by the trustee or trustees without the prior approval of the
18		Director, except as follows:
19		(a) Any or all income, earnings, dividends, or interest
20		accumulations of the Trusteed Assets may be paid over to the
21		United States branch of the non-domestic alien company upon
22		request of the company or its manager, provided that no
23		withdrawal shall be made that reduces the Trusteed Assets
24		below the amount required by Section 60b.
25		(b) For the purpose of substituting other assets

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1		authorized for investment by Article VIII and at least equal
2		in value (as reflected in the most recent financial statement
3		on file with the Director) to those being withdrawn, if such
4		withdrawal is requested in writing by the non-domestic alien
5		company's (i) United States manager or (ii) other United
6		States representative pursuant to general or specific written
7		authority previously given or delegated by the non-domestic
8		alien company's board of directors or other similar governing
9		body, and a copy of such authority has been filed with the
10		trustee or trustees.
11		(c) For the purpose of making deposits required by law in
12		any state for the protection of the non-domestic alien
13		company's policyholders in the United States. The trustee or
14		trustees shall transfer any assets so withdrawn, and in the
15		amount so required to be deposited in the other state,
16		directly to the depository required to receive such deposit in
17		such other state.
18		(d) For the payment of obligations due from the United
19		States branch of the non-domestic alien company to
20		policyholders in the United States, provided that no
21		withdrawal shall be made that reduces the Trusteed Assets
22		below the amount required by Section 60b.
23		(e) For the purpose of withdrawing any amount of the
24		Trusteed Assets in excess of the amount required by Section
25		60b, as determined by the non-domestic alien company's then
26		most current annual statement on file with the Director.

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1		(f) For the purpose of transferring the Trusteed Assets to
2		an appointed liquidator, conservator, or rehabilitator
3		pursuant to the order of a court of competent jurisdiction.
4		(2) If at any time the non-domestic alien company becomes
5		insolvent, or if its Trusteed Assets are less than required
6		under Section 60b, the Director shall in writing order the
7		trustee to suspend the right of the non-domestic alien company
8		or any other person to withdraw assets as otherwise authorized
9		under paragraphs (a), (b), (c), (d) and (e) of subsection (1);
10		and the trustee shall comply with such order until otherwise
11		ordered by the Director.
12		(Source: P.A. 85-1373.)
13		(215 ILCS 5/60e) (from Ch. 73, par. 672e)
14		Sec. 60e. Domestication of Non-domestic Alien Company;
15		definitions. As used in Sections 60e through 60i:
16		(1) "Domestication" means the reorganization of the United
17		States branch of a non-domestic an alien company as the result
18		of which a domestic company shall succeed to all the business
19		and assets and assume all the liabilities of the United States
20		branch of the non-domestic alien company.
21		(2) "United States branch" means the business unit through
22		which business is transacted within the United States by a
23		non-domestic an alien company and the assets and liabilities
24		of such insurer within the United States pertaining to such
25		business.

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1		(3) "Domestic Company" means a stock or mutual insurer
2		incorporated under the laws of this State.
3		(Source: P.A. 85-1373.)
4		(215 ILCS 5/60f) (from Ch. 73, par. 672f)
5		Sec. 60f. Domestication procedure. (1) Upon compliance
6		with Sections 60e through 60i, any non-domestic alien company
7		authorized to do business in this State may, with the prior
8		written approval of the Director, domesticate its United
9		States branch by entering into an agreement in writing with a
10		domestic company providing for the acquisition by the domestic
11		company of all of the assets and the assumption of all of the
12		liabilities of the United States branch.
13		(2) The acquisition of assets and assumption of
14		liabilities of the United States branch by the domestic
15		company shall be effected by filing with the Director an
16		instrument of transfer and assumption in form satisfactory to
17		the Director and executed by the non-domestic alien company
18		and the domestic company.
19		(Source: P.A. 85-1373.)
20		(215 ILCS 5/60g) (from Ch. 73, par. 672g)
21		Sec. 60g. Domestication agreement; authorization;
22		execution. (1) The domestication agreement referred to in
23		Section 60f shall be authorized, adopted, approved, signed,
24		and acknowledged by the non-domestic alien company in

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1		accordance with the laws of the country under which it is
2		organized.
3		(2) In the case of a domestic company, the domestication
4		agreement shall be approved, adopted, and authorized by its
5		board of directors and executed by its president or any vice
6		president and attested by its secretary or assistant secretary
7		under its corporate seal.
8		(Source: P.A. 85-1373.)
9		(215 ILCS 5/60h) (from Ch. 73, par. 672h)
10		Sec. 60h. Director's approval of domestication agreement.
11		An executed counterpart of the domestication agreement,
12		together with certified copies of the corporate proceedings of
13		the domestic company and the non-domestic alien company,
14		approving, adopting and authorizing the execution of the
15		domestication agreement, shall be submitted to the Director
16		for approval. The Director shall thereupon consider the
17		agreement, and, if the Director finds that the same is in
18		accordance with the provisions hereof and that the interests
19		of policyholders of the United States branch of the
20		non-domestic alien insurer and of the domestic company are not
21		materially adversely affected, the Director shall approve the
22		domestication agreement and authorize the consummation thereof
23		in compliance with the provisions of Section 60i. The Director
24		shall approve or disapprove the domestication agreement within
25		60 days after it is submitted to the Director.

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1		(Source: P.A. 85-1373.)
2		(215 ILCS 5/60i) (from Ch. 73, par. 672i)
3		Sec. 60i. Consummation of domestication; transfer of
4		assets and deposits. (1) Upon the filing with the Director of a
5		certified copy of the instrument of transfer and assumption
6		pursuant to which a domestic company succeeds to the business
7		and assets of the United States branch of a non-domestic an
8		alien company and assumes all its liabilities, the
9		domestication of the United States branch shall be deemed to
10		be effective; and thereupon all the rights, franchises, and
11		interests of the United States branch in and to every species
12		of property, real, personal, and mixed, and things in actions
13		thereunder belonging shall be deemed as transferred to and
14		vested in the domestic company, and simultaneously therewith
15		the domestic company shall be deemed to have assumed all of the
16		liabilities of the United States branch. The domestic company
17		shall be considered as having the age as the oldest of the 2
18		parties to the domestication agreement for purposes of
19		complying with the requirements of laws relating to age of
20		company.
21		(2) All deposits of the United States branch held by the
22		Director, or by state officers or other state regulatory
23		agencies pursuant to requirements of state laws, shall be
24		deemed to be held as security for the satisfaction by the
25		domestic company of all liabilities to policyholders within

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1		the United States assumed from the United States branch; and
2		such deposits shall be deemed to be assets of the domestic
3		company and shall be reported as such in the annual financial
4		statements and other reports which the domestic company may be
5		required to file. Upon the ultimate release by any such state
6		officer or agency of any such deposits, the securities and
7		cash constituting such released deposit shall be delivered and
8		paid over to the domestic company as the lawful successor in
9		interest to the United States branch.
10		(3) Contemporaneously with the consummation of the
11		domestication of the United States branch, the Director shall
12		direct the trustee, if any, of the U. S. branch's Trusteed
13		Assets to transfer and deliver to the domestic company all
14		assets, if any, held by such trustee.
15		(Source: P.A. 85-1373.)
16		(215 ILCS 5/60j) (from Ch. 73, par. 672j)
17		Sec. 60j. Trustees of non-domestic alien companies. (1)
18		The directors of a non-domestic an alien company may appoint
19		citizens or corporations of the United States as its trustees
20		to hold funds and assets in trust for the benefit of the
21		policyholders and creditors of the company in the United
22		States. A certified copy of the record of such appointment and
23		of the deed of trust, approved by the Director, shall be filed
24		with him.
25		(2) The Director may examine such trustee and any officers

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1		and agents, books and papers thereof, with respect to the
2		affairs of such non-domestic alien company in the same manner
3		as he may examine officers, agents, books, papers and affairs
4		of companies.
5		(3) The funds and assets so held by such trustees shall,
6		with the deposits otherwise made by the United States branch
7		of the non-domestic alien company in the United States
8		together with loans in connection with its policies to
9		policyholders, and all other funds and assets held by the
10		United States branch of the non-domestic alien company in the
11		United States, constitute the assets of the company for the
12		purpose of making its financial statements required by this
13		Code. For purposes of making financial statements required by
14		this Code, the liabilities of a non-domestic an alien company
15		shall be limited to only those liabilities incurred in
16		connection with its United States business.
17		(4) In applying the risk limitations as provided in
18		Section 144 or any limit on premium volume, the Director shall
19		calculate such limitations based solely on the non-domestic
20		alien company's assets in the United States that, pursuant to
21		subsection (3) of this Section, constitute the assets of the
22		company for purposes of making its financial statements
23		required by this Code and its surplus as regards policyholders
24		as reflected in the most recent financial statement on file
25		with the Director.
26		(Source: P.A. 85-1373.)

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1		(215 ILCS 5/63) (from Ch. 73, par. 675)
2		(Section scheduled to be repealed on January 1, 2027)
3		Sec. 63. Name. The name or designation under which
4		contracts are to be exchanged shall include the words
5		"Reciprocal" or "Inter-Insurance Exchange" or be supplemented
6		by the following words immediately below the name or
7		designation under which such contracts are exchanged: "A
8		Reciprocal" or "An Inter-Insurance Exchange." Such name or
9		designation shall not be the same as or deceptively similar to
10		the name or designation adopted by any other domestic company
11		or any foreign or non-domestic alien company authorized to
12		transact business in this State.
13		(Source: Laws 1937, p. 696.)
14		(215 ILCS 5/86) (from Ch. 73, par. 698)
15		(Section scheduled to be repealed on January 1, 2027)
16		Sec. 86. Scope of Article.
17		(1) This Article applies to all groups including
18		incorporated and individual unincorporated underwriters
19		transacting an insurance business in this State through an
20		attorney-in-fact under the name Lloyds or under a Lloyds plan
21		of operation. Groups that meet the requirements of subsection
22		(3) are referred to in this Code as "Lloyds", and incorporated
23		and individual unincorporated underwriters are referred to as
24		"underwriters".

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1		(2) As used in this Code:
2		"Domestic Lloyds" means a Lloyds having its home office in
3		this State.
4		"Foreign Lloyds" means a Lloyds having its home office in
5		any state of the United States other than this State.
6		"Non-domestic Alien Lloyds" means a Lloyds having its home
7		office or principal place of business in any country other
8		than the United States.
9		(3) A domestic Lloyds must: (i) be established pursuant to
10		a statute or written charter; (ii) provide for governance by a
11		board of directors or similar body; and (iii) establish and
12		monitor standards of solvency of its underwriters. A foreign
13		or non-domestic alien Lloyds must be subject to requirements
14		of its state or country of domicile. Those requirements must
15		be substantially similar to those required of domestic Lloyds.
16		Domestic, foreign, and non-domestic alien Lloyds shall not be
17		subject to Section 144 of this Code.
18		(4) All foreign and non-domestic alien entities and
19		individuals transacting an insurance business as domestic,
20		foreign, or non-domestic alien Lloyds shall notify the
21		Director and the Secretary of State under the provisions of
22		this Article, shall be regulated exclusively by the Director,
23		and shall not be required to obtain a certificate of authority
24		from the Secretary of State pursuant to any other law of this
25		State so long as they solely transact business as a domestic,
26		foreign, or non-domestic alien Lloyds. Upon notification, the

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1		Secretary of State may require submission of additional
2		information to determine whether a foreign or non-domestic
3		alien individual or entity is transacting business solely as a
4		domestic, foreign, or non-domestic alien Lloyds.
5		(Source: P.A. 100-863, eff. 8-14-18.)
6		(215 ILCS 5/87) (from Ch. 73, par. 699)
7		(Section scheduled to be repealed on January 1, 2027)
8		Sec. 87. Certificate of authority. It shall be unlawful
9		for any domestic, foreign or non-domestic alien Lloyds to
10		transact business in this State unless it has first obtained
11		and has in force a certificate of authority issued by the
12		Director. All certificates of authority issued under the
13		provisions of this Article shall terminate on the thirtieth
14		day of June next following the date of issuance and may be
15		renewed upon compliance with this Code.
16		(Source: Laws 1937, p. 696.)
17		(215 ILCS 5/88) (from Ch. 73, par. 700)
18		(Section scheduled to be repealed on January 1, 2027)
19		Sec. 88. Name. The name of any Lloyds authorized to
20		transact business under this Article shall not be the same as,
21		or deceptively similar to, the name of any domestic company or
22		of any foreign or non-domestic alien company authorized to
23		transact business in this State.
24		(Source: Laws 1937, p. 696.)

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1		(215 ILCS 5/103) (from Ch. 73, par. 715)
2		(Section scheduled to be repealed on January 1, 2027)
3		Sec. 103. Non-domestic Alien Lloyds.
4		(1) Each non-domestic alien Lloyds authorized to transact
5		business in this State shall
6		(a) maintain in this State or any other state of the
7		United States in which they are authorized to transact
8		business, cash or securities of a character conformable to
9		the requirements of Article VIII of this Code for domestic
10		companies at least equal at all times to the minimum of
11		admitted assets required by this Article for a domestic
12		Lloyds doing the same kind or kinds of business;
13		(b) make deposits of underwriters in this State in
14		accordance with the requirements imposed upon domestic
15		Lloyds;
16		(c) file with the Director an authenticated copy of
17		its power of attorney and an authenticated copy of the
18		trust agreement or other agreement under which deposits
19		made by underwriters in this State are held;
20		(d) notify the Director forthwith of any amendment to
21		its power of attorney, deposit agreement or other
22		documents by filing with the Director an authenticated
23		copy of such document as amended; and
24		(e) notify the Director forthwith of any change in its
25		name or change of attorney-in-fact or change of address of

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1		its attorney-in-fact.
2		(2) A non-domestic An alien Lloyds shall not establish
3		branches under other or different names or titles.
4		(3) There shall be filed with the Director by the
5		attorney-in-fact for such Lloyds, who or which shall be a
6		resident person or corporation of this State, at the time of
7		filing the annual statement, or more often if required by the
8		Director, a verified statement setting forth
9		(a) the names and addresses of all underwriters of
10		such Lloyds; and
11		(b) a description of the cash and securities deposited
12		in trust by each underwriter.
13		(4) Additional underwriters may join and be included in
14		any such Lloyds subject to such conditions and requirements as
15		may from time to time be imposed by such Lloyds and upon
16		meeting the requirements of this Section, such additional
17		underwriters who may so join such Lloyds shall be bound by the
18		documents on file with the Director in the same manner as
19		though they had personally executed the same and shall have
20		the same rights, powers and duties as all other underwriters
21		of such Lloyds. The attorney-in-fact authorized by the
22		underwriters to act for them shall thereafter be the
23		attorney-in-fact for such additional underwriters to the
24		extent of the power of attorney or other document or
25		authorization by such underwriters to the attorney-in-fact.
26		(Source: P.A. 90-794, eff. 8-14-98.)

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1		(215 ILCS 5/104) (from Ch. 73, par. 716)
2		(Section scheduled to be repealed on January 1, 2027)
3		Sec. 104. Policy forms. Every policy issued in this State
4		by any domestic, foreign or non-domestic alien Lloyds shall
5		have printed upon its face and back the name of such Lloyds,
6		the name and address of its attorney-in-fact in this State or
7		agent for service of process in this State, and in type not
8		smaller than ten point the words "Not Incorporated."
9		(Source: Laws 1937, p. 696.)
10		(215 ILCS 5/105) (from Ch. 73, par. 717)
11		(Section scheduled to be repealed on January 1, 2027)
12		Sec. 105. Director as agent; service of process.
13		(1) The attorney-in-fact of every Lloyds transacting
14		business in this State shall file with the Director a duly
15		executed instrument whereby such Lloyds shall appoint and
16		constitute the Director, his successor or successors in
17		office, the true and lawful agent of such Lloyds upon whom all
18		lawful process in any action or legal proceeding against such
19		Lloyds may be served, and shall agree that any lawful process
20		against such Lloyds which may be served upon said agent shall
21		be of the same force and validity as if served upon the
22		attorney-in-fact, and that the authority thereof shall
23		continue in force irrevocably so long as any liability of such
24		Lloyds in this State shall remain outstanding.

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1		(2) In any suit instituted against any domestic, foreign
2		or non-domestic alien Lloyds transacting business in this
3		State, it shall not be necessary to name the underwriters as
4		parties defendant, but such Lloyds may be named as the party
5		defendant in any such suit and service may be had upon all the
6		underwriters by service upon the last appointed
7		attorney-in-fact or by service upon the Director, and not
8		otherwise. Any such suit may be brought in the county in which
9		the cause of action arises or in which the claimant resides.
10		When such process is served upon the Director as agent to
11		accept service, duplicate copies of such process shall be
12		delivered to him and he shall immediately forward one copy of
13		each such process to the last appointed attorney-in-fact by
14		certified or registered mail, postage prepaid, giving the day
15		and hour of such service.
16		(Source: P.A. 88-535.)
17		(215 ILCS 5/Art. VI heading)
18		ARTICLE VI. FOREIGN OR NON-DOMESTIC ALIEN COMPANIES
19		(Article scheduled to be repealed on January 1, 2027)
20		(215 ILCS 5/108) (from Ch. 73, par. 720)
21		(Section scheduled to be repealed on January 1, 2027)
22		Sec. 108. Companies that may be admitted to do business.
23		(1) Upon complying with the provisions of this Article, a
24		foreign or non-domestic alien company organized as a stock

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1		company, mutual company, reciprocal, Lloyds or fraternal
2		benefit society may be admitted to transact in this State the
3		kind or kinds of business which a domestic company similarly
4		organized may be authorized to transact under this Code. Any
5		certificate of authority issued to a non-domestic an alien
6		Lloyds shall be subject to all of the provisions of Section
7		103.
8		(2) No foreign or non-domestic alien mutual benefit
9		society or burial society shall hereafter be admitted to
10		transact business in this State.
11		(3) No foreign or non-domestic alien company shall
12		transact in this State any insurance business not classified
13		under Section 4.
14		(Source: P.A. 82-498.)
15		(215 ILCS 5/109) (from Ch. 73, par. 721)
16		(Section scheduled to be repealed on January 1, 2027)
17		Sec. 109. Application for certificate of authority.
18		(1) A foreign or non-domestic alien company in order to
19		procure a certificate of authority to transact business in
20		this State shall make application therefor to the Director.
21		The application shall set forth:
22		(a) the name of the company, and the state or country
23		under the laws of which it is organized or authorized;
24		(b) the title of the Act under or by which it was
25		incorporated or organized, the date of its incorporation

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1		or organization and, if a corporation, the period of its
2		duration;
3		(c) the class or classes of insurance business, as
4		provided in Section 4, in which it proposes to engage in
5		this State, and the kinds of insurances in each class it
6		proposes to write in this State;
7		(d) if a life company, that it is not engaged in any
8		state in practices which, if engaged in in this State,
9		would constitute a violation of Section 237;
10		(e) whether or not it was authorized to transact
11		business in this State during any part of the 3-year
12		period prior to its application and, if so, for what
13		period;
14		(f) whether or not it survives or was formed by a
15		merger, consolidation, reorganization, or reincorporation
16		effected within 3 years prior to its application and, if
17		so, whether and for what period or periods any of the
18		companies that are parties to the merger, consolidation,
19		reorganization, or reincorporation were authorized to
20		transact business in this State within the 3-year period
21		prior to its application; and
22		(g) such additional information as the Director may
23		require to enable the Director to determine whether the
24		company is entitled to a certificate of authority to
25		transact business in this State and to determine and
26		assess the taxes, fees and charges payable as in this Code

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1		prescribed.
2		(2) Such application shall be made on forms prescribed and
3		furnished by the Director and shall be executed by the company
4		by its president or a vice-president or executive officer
5		corresponding thereto, and verified by such officer, and if a
6		corporation, the corporate seal shall be thereto affixed,
7		attested by its secretary or other proper officer.
8		(Source: P.A. 90-655, eff. 7-30-98.)
9		(215 ILCS 5/110) (from Ch. 73, par. 722)
10		(Section scheduled to be repealed on January 1, 2027)
11		Sec. 110. Delivery to director of application and
12		documents. There shall be delivered to the Director
13		(a) the application of the company for a certificate
14		of authority;
15		(b) a copy of its articles of incorporation or
16		articles of association as amended, duly certified by the
17		proper officer of the state or country under whose laws
18		the company is organized or incorporated, or if a
19		reciprocal or Lloyds the power of attorney of the
20		attorney-in-fact;
21		(c) if a non-domestic an alien company, a copy of the
22		appointment and authority of its United States manager,
23		certified by a proper officer of the company;
24		(d) a copy of its by-laws or regulations, and if a
25		fraternal benefit society, a copy of its constitution,

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1		certified by its secretary or officer corresponding
2		thereto;
3		(e) the instrument authorizing service of process on
4		the Director required by section 112;
5		(f) a statement of its financial condition and
6		business as of the end of the preceding calendar year
7		complying as to form, content and verification with the
8		requirements of this Code for annual statements, or a
9		financial statement as of such later date as the Director
10		may require;
11		(g) a copy of the last report of examination certified
12		to by an insurance commissioner or other proper
13		supervisory official; and
14		(h) a certificate from the proper official of the
15		state or country wherein it is incorporated or organized
16		that it is duly incorporated or organized and is
17		authorized to write the kind or kinds of insurance which
18		it proposes to write in this State.
19		(Source: Laws 1965, p. 422.)
20		(215 ILCS 5/111) (from Ch. 73, par. 723)
21		(Section scheduled to be repealed on January 1, 2027)
22		Sec. 111. Conditions of issuance of certificate of
23		authority.
24		(1) Before a certificate of authority to transact business
25		in this State is issued to a foreign or non-domestic alien

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1		company, such company shall satisfy the Director that:
2		(a) the company is duly organized under the laws of
3		the state or country under whose laws it professes to be
4		organized and authorized to do the business it is
5		transacting or proposes to transact;
6		(b) its name is not the same as, or deceptively
7		similar to, the name of any domestic company, or of any
8		foreign or non-domestic alien company authorized to
9		transact business in this State;
10		(c) if a company transacting business of the kind or
11		kinds enumerated in Class 1 of Section 4, it is not
12		engaging in practices in any state which if engaged in
13		this State, would constitute a violation of Section 237;
14		and it is not transacting any kinds of business other than
15		those enumerated in Class 1 of Section 4;
16		(d) if a stock company, it has a paid up capital and
17		surplus at least equal to the capital and original surplus
18		required by this Code for a domestic company doing the
19		same kind or kinds of business or, if a mutual company or
20		reciprocal, it has a surplus and provision for contingent
21		liability of policyholders, at least equal to the original
22		surplus and provision for contingent liability of
23		policyholders required for a similar domestic company
24		doing the same kind or kinds of business, or, if a
25		fraternal benefit society, it meets the requirements
26		prescribed in this Code for the organization of a domestic

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1		company or society, or if a Lloyds it meets the
2		requirements of Article V;
3		(e) its funds are invested in accordance with the laws
4		of its domicile; and
5		(f) in the case of a stock company its minimum capital
6		and surplus and required reserves, or in the case of a
7		mutual company or a reciprocal proposing to issue policies
8		without contingent liability, its minimum surplus and
9		required reserves, or in the case of any other company,
10		all its funds, are invested in securities or property
11		which afford a degree of financial security equal to that
12		required for similar domestic companies, provided that
13		this clause shall not be construed as requiring the
14		application of limitations relating either to the kind or
15		amount of securities prescribed by this Code for the
16		investments of domestic companies.
17		(2) In determining whether a non-domestic an alien company
18		complies with the provisions of subsection (1) of this section
19		the Director shall consider only business transacted in the
20		United States, only the assets described in Section 60j and
21		only liabilities in connection with its United States
22		business.
23		(3) Before a certificate of authority is issued to a
24		foreign or non-domestic alien company, other than a Lloyds, it
25		shall deposit with the Director securities which are
26		authorized investments for similar domestic companies under

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1		Section 126.11A(1), 126.11A(2), 126.24A(1), or 126.24A(2) of
2		the amount, if any, required of a domestic company similarly
3		organized and doing the same kind or kinds of business; or in
4		lieu of such deposit such foreign or non-domestic alien
5		company shall satisfy the Director that it has on deposit with
6		an official of a state of the United States or a depositary
7		designated or authorized for such purpose by such official,
8		authorized by the law of such state to accept such deposit,
9		securities of at least a like amount, for the benefit and
10		security of all creditors, policyholders and policy
11		obligations of such company.
12		(4) Before issuing a certificate of authority to a foreign
13		or non-domestic alien company, the Director may cause an
14		examination to be made of the condition and affairs of such
15		company.
16		(Source: P.A. 90-418, eff. 8-15-97; 90-794, eff. 8-14-98.)
17		(215 ILCS 5/112) (from Ch. 73, par. 724)
18		(Section scheduled to be repealed on January 1, 2027)
19		Sec. 112. Service of process - Director as attorney.
20		(1) Every foreign or non-domestic alien company desiring
21		to transact business in this State shall file with the
22		Director a duly executed instrument whereby the company shall
23		appoint and constitute the Director and his successor or
24		successors in office the true and lawful attorney of such
25		company upon whom all lawful process in any action or legal

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1		proceeding against it may be served and shall agree that any
2		such lawful process against it which may be served upon its
3		said attorney as provided in this section shall be of the same
4		force and validity as if served upon the company and that the
5		authority thereof shall continue in force irrevocably so long
6		as any liability of the company in the State shall remain
7		outstanding.
8		(2) Process authorized by such instrument or by any
9		similar instrument heretofore executed shall be served by
10		delivering to and leaving with the Director duplicate copies
11		of such process with payment of the fee prescribed by this
12		Code, and the service thereof upon such attorney shall be
13		deemed service upon the company. The Director shall forthwith
14		forward one copy of each such process by certified or
15		registered mail prepaid to the company, or in the case of a
16		non-domestic an alien company, to the United States Manager or
17		last appointed United States general agent of the company,
18		giving the day and the hour of such service. Service of such
19		process shall not be complete until the copy thereof has been
20		so mailed and received by the company, and the certified
21		receipt or registry receipt shall be prima facie evidence of
22		the completion of such service. Service of process on a
23		reciprocal or Lloyds shall be governed by sections 77 and 105
24		respectively.
25		(Source: P.A. 83-598.)

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1		(215 ILCS 5/113) (from Ch. 73, par. 725)
2		(Section scheduled to be repealed on January 1, 2027)
3		Sec. 113. When certificate of authority to issue. When a
4		foreign or non-domestic alien company has complied with the
5		requirements of this Article and all other requirements
6		imposed on such company by existing laws and has paid the
7		taxes, fees and charges imposed by law, and the operational
8		history of the company when reviewed in conjunction with its
9		loss experience, the kinds and nature of risks insured, the
10		financial condition of the company and its ownership and the
11		ratio of annual premium volume to incurred acquisition
12		expenses and to its policyholders' surplus indicates a
13		condition such that the expanded operation of the company in
14		this State will not create a condition which might be
15		hazardous to its policyholders, creditors or the general
16		public, the Director must file in his office the documents
17		delivered to him and must issue to the company a certificate of
18		authority to transact in this State the kind or kinds of
19		business specified therein. Such certificate shall expire on
20		the 30th day of June of the calendar year succeeding the
21		calendar year in which such certificate is issued.
22		(Source: P.A. 77-1513.)
23		(215 ILCS 5/113.1) (from Ch. 73, par. 725.1)
24		(Section scheduled to be repealed on January 1, 2027)
25		Sec. 113.1. Effect of acceptance of certificate of

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1		authority.
2		(1) No foreign or non-domestic alien company which accepts
3		a certificate of authority or renewal certificate of authority
4		to transact in this State any insurance business as described
5		in Section 4 of this Code shall transfer by sale,
6		contribution, merger, consolidation, reinsurance or otherwise,
7		its direct policy obligations under insurance contracts with
8		Illinois policyholders unless:
9		a. the transfer is made to a company authorized to
10		transact in this State the type of insurance business
11		transferred; or
12		b. the transferring company gives 30 days prior
13		written notice to each policyholder to be transferred
14		stating that the insurance contract and the company's
15		liabilities thereunder are to be transferred to a
16		specified insurer which is not subject to regulation by
17		the Illinois Insurance Department or the administrative
18		requirements of the Illinois Insurance Code; and
19		c. the unauthorized company to which the insurance
20		business is to be transferred makes and maintains a
21		special deposit with the Director for the protection and
22		benefit of all Illinois policyholders of such unauthorized
23		company, in assets acceptable to the Director and having a
24		fair market value not less than the required statutory
25		reserves for the Illinois insurance business to be
26		transferred.

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1		(2) Any and all transfers resulting in the violation of
2		this Section shall be construed as a violation of all
3		applicable provisions of Article VII of this Code; including,
4		but not limited to, Section 121-4 providing for liability to
5		insureds for claims or insured losses not honored by the
6		unauthorized insurer.
7		(3) Unless permitted by and obtained in compliance with
8		this Section, or specifically authorized by another provision
9		of this Code, it shall be unlawful for any unauthorized
10		company to obtain as direct insurer any insurance contracts
11		written in this State.
12		(Source: P.A. 86-753.)
13		(215 ILCS 5/114) (from Ch. 73, par. 726)
14		(Section scheduled to be repealed on January 1, 2027)
15		Sec. 114. Renewal of certificate of authority.
16		(1) The Director shall renew for one year the certificate
17		of authority of a foreign or non-domestic alien company on the
18		first day of July of the calendar year following the calendar
19		year in which it is admitted to transact business in this State
20		and annually thereafter, without application by the company,
21		upon payment of the annual privilege tax imposed by this Code,
22		if any, provided the Director is satisfied that
23		(a) none of the facts specified in this article as
24		grounds for revoking a certificate of authority exists;
25		and

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1		(b) the company is complying with the conditions for
2		admission in respect to capital, contingent liability, the
3		investment of its assets or the maintenance of deposits in
4		this or another state and maintains the surplus which
5		similar domestic companies transacting the same kind or
6		kinds of business are required to maintain.
7		(2) Except in case of nonpayment of taxes, the Director
8		shall give notice of his intention to refuse to renew the
9		certificate of authority of a foreign or non-domestic alien
10		company and the grounds therefor at least twenty days before
11		the end of the term for which the existing certificate was
12		issued, and, the company shall be given an opportunity for a
13		hearing before the end of such term.
14		(3) In the event that a company admitted to transact
15		business in this State prior to the effective date of this Code
16		has been and is transacting in this State or in any other state
17		or country the kind or kinds of business enumerated in Class 1
18		of Section 4 and in addition thereto any of the kinds of
19		business not enumerated in such class, the Director may for a
20		period of three years renew annually its certificate of
21		authority to transact such kinds of business. At the end of
22		such three year period or at the end of any extended period as
23		herein provided for, the Director may extend the period during
24		which the certificate of authority of such company may be
25		renewed annually, upon a showing by the company at a hearing
26		before the Director that

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1		(a) it has made reasonable progress in the
2		discontinuance of kinds of business other than those
3		enumerated in Class 1 of Section 4; and
4		(b) complete and immediate discontinuance of such
5		kinds of business would result in undue loss to the
6		company and the policyholders would suffer materially
7		thereby; or
8		(c) there are other reasons for such extension deemed
9		by the Director to be good and sufficient. The extension
10		herein provided for shall be for such period as the
11		Director may deem proper on the showing made, but the
12		total of such extended periods shall not exceed three
13		years.
14		(Source: P.A. 82-498.)
15		(215 ILCS 5/115) (from Ch. 73, par. 727)
16		(Section scheduled to be repealed on January 1, 2027)
17		Sec. 115. Amended certificate of authority.
18		(1) In the event that a foreign or non-domestic alien
19		company authorized to transact business in this State changes
20		its name or desires to transact in this State a kind or kinds
21		of business other than those it is then authorized to
22		transact, it shall file with the Director an application for
23		an amended certificate of authority.
24		(2) Such application shall comply as to form and manner of
25		execution with the requirements of this Article for an

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1		original application and shall set forth the name of the
2		company, the respects in which the company desires its
3		certificate of authority amended, and such other information
4		as is necessary or appropriate to enable the Director to
5		determine whether such an amended certificate of authority
6		should be issued.
7		(3) The Director shall issue such amended certificate if
8		he is satisfied that
9		(a) the company might lawfully be authorized to
10		transact the kind or kinds of business it desires to
11		transact if application for such authority were made in an
12		original application; and
13		(b) the conditions provided for in Section 111 are
14		complied with.
15		(Source: Laws 1937, p. 696.)
16		(215 ILCS 5/116) (from Ch. 73, par. 728)
17		(Section scheduled to be repealed on January 1, 2027)
18		Sec. 116. Amendments to articles of incorporation.
19		Whenever the articles of incorporation or articles of
20		association of a foreign or non-domestic alien company
21		authorized to transact business in this State shall be
22		amended, such company shall, within thirty days after the
23		effective date of such amendment, file with the Director a
24		copy thereof duly authenticated by the proper officer of the
25		state or country under the laws of which such company is

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1		organized. The filing of such copy shall not of itself enlarge
2		the authority of the company in the transaction of business in
3		this State, nor authorize such company to transact business in
4		this State under any other name than the name set forth in its
5		certificate of authority.
6		(Source: Laws 1937, p. 696.)
7		(215 ILCS 5/117) (from Ch. 73, par. 729)
8		(Section scheduled to be repealed on January 1, 2027)
9		Sec. 117. Merger or consolidation.
10		(1) Whenever a foreign or non-domestic alien company
11		authorized to transact business in this State shall be the
12		surviving company of a statutory merger permitted by the laws
13		of the state or country under which it is organized, and such
14		merger is not subject to the provisions of Article X; it shall
15		forthwith file with the Director
16		(a) copies of the agreement and certificate of merger
17		duly authenticated by the proper officer of the state or
18		country under the laws of which such statutory merger was
19		effected; and
20		(b) if any of the companies party to such merger were
21		not admitted to transact business in this State, a
22		statement of the financial condition and business of each
23		of such companies, as of the end of the preceding calendar
24		year complying as to form, content and verification with
25		the requirements of this Code for annual statements, or a

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1		financial statement as of such later date as the Director
2		may require.
3		(2) It shall not be necessary for such surviving company
4		to procure a new certificate of authority to transact business
5		in this State nor an amended certificate unless the name of
6		such company be changed thereby or unless the company desires
7		to transact in this State a kind or kinds of business other
8		than those which it is then authorized to transact.
9		(3) Whenever a foreign or non-domestic alien company
10		authorized to transact business in this State shall be a party
11		to a statutory merger and such company shall not be the
12		surviving company, or if such foreign or non-domestic alien
13		company shall be a party to a consolidation, then the
14		certificate of authority of such foreign or non-domestic alien
15		company shall terminate upon such merger or consolidation, and
16		the surviving company, if not previously authorized to
17		transact business in this State, or the new company, in the
18		case of consolidation, shall be subject to the same
19		requirements for admission to transact business in this State
20		as any other foreign or non-domestic alien company.
21		(Source: Laws 1937, p. 696.)
22		(215 ILCS 5/118) (from Ch. 73, par. 730)
23		(Section scheduled to be repealed on January 1, 2027)
24		Sec. 118. Withdrawal from the State.
25		(1) Any foreign or non-domestic alien company admitted to

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1		do business in this State may withdraw from this State by
2		filing with the Director a statement of withdrawal, signed and
3		verified by a president, vice-president or an executive
4		officer corresponding thereto, or in the case of a reciprocal
5		or Lloyds, by the attorney-in-fact, and setting forth
6		(a) that the company surrenders its authority to
7		transact business in this State and returns for
8		cancellation its certificate of authority;
9		(b) except in the case of a reciprocal or Lloyds, that
10		the withdrawal of the company from this State has been
11		duly authorized by the board of directors, trustees or
12		other governing body of such company; and
13		(c) a postoffice address to which the Director may
14		mail a copy of any process against the withdrawing company
15		that may be served upon him.
16		(2) Upon the filing of such statement together with its
17		certificate of authority with the Director and payment of any
18		taxes or charges that may be due, the Director shall cancel the
19		certificate of authority and return the cancelled certificate
20		to the company. The authority of the company to transact
21		business in this State shall thereupon cease.
22		(Source: Laws 1937, p. 696.)
23		(215 ILCS 5/119) (from Ch. 73, par. 731)
24		(Section scheduled to be repealed on January 1, 2027)
25		Sec. 119. Revocation and suspension of certificate of

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1		authority.
2		(1) The Director may revoke or suspend the certificate of
3		authority of a foreign or non-domestic alien company or may by
4		order require such insurance company to pay to the people of
5		the State of Illinois a penalty in a sum not exceeding $500,
6		and upon the failure of such insurance company to pay such
7		penalty within 20 days after the mailing of such order,
8		postage prepaid, certified or registered, and addressed to the
9		last known place of business of such insurance company, unless
10		such order is stayed by an order of a court of competent
11		jurisdiction, the Director of Insurance may revoke or suspend
12		the license of such insurance company for any period of time up
13		to, but not exceeding a period of, 2 years whenever he finds
14		that such company
15		(a) is insolvent;
16		(b) fails to comply with the requirements for
17		admission in respect to capital, contingent liability, the
18		investment of its assets or the maintenance of deposits in
19		this or another state or fails to maintain the surplus
20		which similar domestic companies transacting the same kind
21		or kinds of business are required to maintain;
22		(c) is in such a financial condition that its further
23		transaction of business in this State would be hazardous
24		to policyholders and creditors in this State and to the
25		public;
26		(d) has refused or neglected to pay a valid final

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1		judgment against such company within 30 days after the
2		rendition of such judgment;
3		(e) has violated any law of this State or has in this
4		State violated its charter or exceeded its corporate
5		powers;
6		(f) has refused to submit its books, papers, accounts,
7		records, or affairs to the reasonable inspection or
8		examination of the Director, his actuaries, deputies or
9		examiners;
10		(g) has an officer who has refused upon reasonable
11		demand to be examined under oath touching its affairs;
12		(h) fails to file its annual statement within 30 days
13		after the date when it is required by law to file such
14		statement;
15		(i) fails to file with the Director a copy of an
16		amendment to its charter or articles of association within
17		30 days after the effective date of such amendment;
18		(j) fails to file with the Director copies of the
19		agreement and certificate of merger and the financial
20		statements of the merged companies, if required, within 30
21		days after the effective date of the merger;
22		(k) fails to pay any fees, taxes or charges prescribed
23		by this Code within 30 days after they are due and payable;
24		provided, however, that in case of objection or legal
25		contest the company shall not be required to pay the tax
26		until 30 days after final disposition of the objection or

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1		legal contest.
2		(l) fails to file any report or reports for the
3		purpose of enabling the Director to compute the taxes to
4		be paid by such company within 30 days after the date when
5		it is required by law to file such report or reports;
6		(m) has had its corporate existence dissolved or its
7		certificate of authority revoked in the state in which it
8		was organized; or
9		(n) has had all its risks reinsured in their entirety
10		in another company.
11		(2) Except for the grounds stated in clauses (a), (c) or
12		(k) of subsection (1) of this section the Director shall not
13		revoke or suspend the certificate of authority of a foreign or
14		non-domestic alien company until he has given the company at
15		least twenty days' notice of the revocation or suspension and
16		of the grounds therefor and has afforded the company an
17		opportunity for a hearing.
18		(Source: P.A. 83-598.)
19		(215 ILCS 5/120) (from Ch. 73, par. 732)
20		(Section scheduled to be repealed on January 1, 2027)
21		Sec. 120. Withdrawal of deposits. When a foreign or
22		non-domestic alien company has withdrawn from this State or
23		has had its certificate of authority to transact business in
24		this State revoked and such company desires to withdraw any
25		deposit made in this State pursuant to this Code, the Director

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1		shall upon the application of the company and at its expense,
2		give notice of such intention to the insurance commissioner or
3		other proper supervisory official of each state or country
4		where it appears from information on file with the Director,
5		the company is authorized to transact business, and shall
6		publish notice of such intention in a newspaper of general
7		circulation in this State once a week for four consecutive
8		weeks. After such notice and publication the Director shall
9		deliver to such company or its assigns the securities so
10		deposited when he is satisfied upon examination and
11		investigation made by him, or under his authority, and upon
12		the oaths of the president and secretary or other chief
13		officers of the company that all debts and liabilities of
14		every kind due and to become due which the deposit was made to
15		secure have been paid or otherwise extinguished.
16		(Source: Laws 1937, p. 696.)
17		(215 ILCS 5/123) (from Ch. 73, par. 735)
18		Sec. 123. Service of process upon an unauthorized foreign
19		or non-domestic alien company.
20		(1) The purpose of this Section is to subject unauthorized
21		foreign and non-domestic alien companies to the jurisdiction
22		of courts of this State in actions by or on behalf of insureds,
23		reinsureds, or beneficiaries under insurance or reinsurance
24		contracts. The Legislature declares that it is a subject of
25		concern that many residents of this State or corporations

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1		authorized to do business in this State hold policies of
2		insurance or reinsurance issued by companies not authorized to
3		do business in this State, thus presenting to such residents
4		or corporations authorized to do business in this State the
5		often insuperable obstacle of resorting to distant forums for
6		the purpose of asserting legal rights under such policies. In
7		furtherance of such State interest, the Legislature herein
8		provides a method of substituted service of process upon such
9		companies and declares that in so doing it exercises its power
10		to protect its residents and corporations authorized to do
11		business in this State and to define, for the purpose of this
12		statute, what constitutes doing business in this State, and
13		also exercises powers and privileges available to the State by
14		virtue of Public Law 15, 79th Congress of the United States,
15		Chapter 20, 1st. Sess., S. 340, as amended, which declares
16		that the business of insurance and every person engaged
17		therein shall be subject to the laws of the several states.
18		(2) Any of the following acts in this State, effected by
19		mail or otherwise, by an unauthorized foreign or non-domestic
20		alien company: (a) the issuance or delivery of contracts of
21		insurance or reinsurance to residents of this State or to
22		corporations authorized to do business therein, (b) the
23		solicitation of applications for such contracts, (c) the
24		collection of premiums, membership fees, assessments or other
25		considerations for such contracts, or (d) any other
26		transaction of business, is equivalent to and shall constitute

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1		an appointment by such company, of the Director and his or her
2		successor or successors in office, to be its true and lawful
3		attorney upon whom may be served all lawful process in any
4		action or proceeding against it, arising out of such policy or
5		contract of insurance or reinsurance, and the acts shall be a
6		signification of its agreement that any such process against
7		it which is so served shall be of the same legal force and
8		validity as if served upon the company.
9		(3) Service of such process shall be made by delivering
10		and leaving with the Director a copy thereof and the payment to
11		the Director of the fee prescribed by this Code. The Director
12		shall keep a record of all process so served upon him or her.
13		Such process shall be sufficient service upon such foreign or
14		non-domestic alien company provided notice of such service and
15		a copy of the process are, within 10 days thereafter, sent by
16		certified or registered mail by the plaintiff's attorney of
17		record to the defendant at the last known principal place of
18		business of the defendant, and the defendant's receipt and the
19		plaintiff's attorney's affidavit of compliance herewith are
20		filed with the Clerk of the Court in which such action is
21		pending on or before the return date of the process or within
22		such further time as the court may allow.
23		(4) Service of process in any such action against any such
24		company shall in addition to the mode hereinabove described be
25		valid and legal if served upon any person within this State
26		who, in this State on behalf of such company, is

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1		(a) soliciting insurance or reinsurance, or
2		(b) making, issuing, or delivering any policies or
3		contracts of insurance or reinsurance, or
4		(c) collecting or receiving any premium, membership
5		fee, assessment or other consideration for insurance or
6		reinsurance, or
7		(d) in any manner aiding or assisting in doing any of
8		the things enumerated in clauses (a), (b), or (c) of this
9		subsection; and a copy of such process is within 10 days
10		thereafter sent by certified or registered mail by the
11		plaintiff's attorney of record to the defendant at the
12		last known principal place of business of the defendant
13		and the defendant's receipt and the plaintiff's attorney's
14		affidavit of compliance herewith are filed with the clerk
15		of the court in which such action is pending on or before
16		the return date of the process or within such further time
17		as the court may allow.
18		(5) Before any unauthorized foreign or non-domestic alien
19		company shall file or cause to be filed any pleading in any
20		action or proceeding, including any arbitration, instituted
21		against it, such unauthorized company shall either (1) deposit
22		with the clerk of the court in which such action or proceeding
23		is pending or with the clerk of the court in the jurisdiction
24		in which the arbitration is pending cash or securities or file
25		with such clerk a bond with good and sufficient sureties, to be
26		approved by the court, in an amount to be fixed by the court

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1		sufficient to secure the payment of any final judgment which
2		may be rendered in such action, proceeding, or arbitration; or
3		(2) where the unauthorized company continues to transact the
4		business of insurance by issuing new contracts of insurance or
5		reinsurance, procure a certificate of authority to transact
6		the business of insurance in this State.
7		The court in any action or proceeding, in which service is
8		made in the manner provided in subsections (3) or (4) may, in
9		its discretion, order such postponement as may be necessary to
10		afford the defendant reasonable opportunity to comply with the
11		provisions of this subsection and to defend such action.
12		Nothing in this Section is to be construed to prevent an
13		unauthorized foreign or non-domestic alien company from filing
14		a motion to quash process or to set aside service thereof made
15		in the manner provided in subsections (3) or (4) on the ground
16		either (a) that such unauthorized company has not done any of
17		the acts enumerated in subsection (2) or (b) that the person on
18		whom service was made pursuant to subsection (4) was not doing
19		any of the acts therein enumerated.
20		(6) In any action against an unauthorized foreign or
21		non-domestic alien company upon a contract of insurance or
22		reinsurance issued or delivered in this State to a resident
23		thereof or to a corporation authorized to do business therein,
24		if the company has failed for 30 days after demand prior to the
25		commencement of the action to make payment in accordance with
26		the terms of the contract, and it appears to the court that

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1		such refusal was vexatious and without reasonable cause, the
2		court may allow to the plaintiff a reasonable attorney fee and
3		include such fee in any judgment that may be rendered in such
4		action. Such fee shall not exceed 12-1/2 per cent of the amount
5		which the court or jury finds the plaintiff is entitled to
6		recover against the insurer, but in no event shall such fee be
7		less than $25. Failure of a company to defend any such action
8		shall be deemed prima facie evidence that its failure to make
9		payment was vexatious and without reasonable cause.
10		(7) No plaintiff shall be entitled to a judgment by
11		default under this Section until the expiration of 30 days
12		from the date of the filing of the affidavit of compliance.
13		(8) The provisions of this Section shall not apply to any
14		action or proceeding against any unauthorized foreign or
15		non-domestic alien company arising out of any contract of
16		direct insurance
17		(a) effected in accordance with Section 445, or
18		(b) covering ocean marine, aircraft, railway insurance
19		risks, or
20		(c) against legal liability arising out of the
21		ownership, operation or maintenance of any property having
22		a permanent situs outside this State, or
23		(d) against loss of or damage to any property having a
24		permanent situs outside this State,
25		where such contract of insurance contains a provision
26		designating the Director and his or her successor or

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1		successors in office or a bona fide resident of Illinois to be
2		the true and lawful attorney of such non-admitted insurer upon
3		whom may be served all lawful process in any action or
4		proceeding arising out of any such contract of insurance or
5		where the insurer enters a general appearance in any such
6		action or proceeding.
7		(9) Nothing in this Section contained shall limit or
8		affect the right to serve any process, notice or demand
9		required or permitted by law to be served upon any company in
10		any other manner now or hereafter permitted by law.
11		(Source: P.A. 90-53, eff. 7-3-97.)
12		(215 ILCS 5/123.1) (from Ch. 73, par. 735.1)
13		Sec. 123.1. Service of process upon unauthorized insurers
14		for false advertising.
15		(1) (a) The purpose of this Act is to subject to the
16		jurisdiction of the Director of Insurance of this State and to
17		the jurisdiction of the courts of this State insurers not
18		authorized to transact business in this State which place in
19		or send into this State any false advertising designed to
20		induce residents of this State to purchase insurance from
21		insurers not authorized to transact business in this State.
22		The Legislature declares it is in the interest of the citizens
23		of this State who purchase insurance from insurers which
24		solicit insurance business in this State in the manner set
25		forth in the preceding sentence that such insurers be subject

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1		to the provisions of this Act. In furtherance of such state
2		interest, the Legislature herein provides a method of
3		substituted service of process upon such insurers and declares
4		that in so doing, it exercises its power to protect its
5		residents and also exercises powers and privileges available
6		to the State by virtue of Public Law 15, 79th Congress of the
7		United States, Chapter 20, 1st Session, S. 340, which declares
8		that the business of insurance and every person engaged
9		therein shall be subject to the laws of the several states; the
10		authority provided herein to be in addition to any existing
11		powers of this State.
12		(b) The provisions of this Section shall be liberally
13		construed.
14		(2) No unauthorized foreign or non-domestic alien insurer
15		of the kind described in subsection (1) shall make, issue,
16		circulate or cause to be made, issued or circulated, to
17		residents of this State any estimate, illustration, circular,
18		pamphlet, or letter, or cause to be made in any newspaper,
19		magazine or other publication or over any radio or television
20		station, any announcement or statement to such residents
21		misrepresenting its financial condition or the terms of any
22		contracts issued or to be issued or the benefits or advantages
23		promised thereby, or the dividends or share of the surplus to
24		be received thereon in violation of Article XXVI, and whenever
25		the Director shall have reason to believe that any such
26		insurer is engaging in such unlawful advertising, it shall be

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1		his duty to give notice of such fact by certified or registered
2		mail to such insurer and to the insurance supervisory official
3		of the domiciliary state of such insurer. For the purpose of
4		this Section the domiciliary state of a non-domestic an alien
5		insurer shall be deemed to be the state of entry or the state
6		of the principal office in the United States.
7		(3) If after thirty days following the giving of the
8		notice mentioned in subsection (2) such insurer has failed to
9		cease making, issuing, or circulating such false
10		misrepresentations or causing the same to be made, issued or
11		circulated in this State, and if the Director has reason to
12		believe that a proceeding by him in respect to such matters
13		would be to the interest of the public, and that such insurer
14		is issuing or delivering contracts of insurance to residents
15		of this State or collecting premiums on such contracts or
16		doing any of the acts enumerated in subsection (4), he shall
17		take action against such insurer under Article XXVI.
18		(4) (a) Any of the following acts in this State, effected
19		by mail or otherwise, by any such unauthorized foreign or
20		non-domestic alien insurer:
21		(i) the issuance or delivery of contracts or insurance
22		to residents of this State; or
23		(ii) the solicitation of applications for such
24		contracts; or
25		(iii) the collection of premiums, membership fees,
26		assessments or other considerations for such contracts; or

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1		(iv) any other transaction of insurance business;
2		is equivalent to and shall constitute an appointment by such
3		insurer of the Director and his successor or successors in
4		office, to be its true and lawful attorney, upon whom may be
5		served all statements of charges, notices and lawful process
6		in any proceeding instituted in respect to the
7		misrepresentations set forth in subsection (2) hereof under
8		the provisions of Article XXVI, or in any action, suit or
9		proceeding for the recovery of any penalty therein provided,
10		and any such act shall be signification of its agreement that
11		such service of statement of charges, notices or process is of
12		the same legal force and validity as personal service of such
13		statement of charges, notices or process in this State, upon
14		such insurer.
15		(b) Service of a statement of charges and notices under
16		Article XXVI shall be made by any deputy or employee of the
17		Department of Insurance delivering to and leaving with the
18		Director or some person in apparent charge of his office, two
19		copies thereof. Service of process issued by any court in any
20		action, suit or proceeding to collect any penalty under
21		Article XXVI provided, shall be made by delivering and leaving
22		with the Director, or some person in apparent charge of his
23		office, two copies thereof. The Director shall forthwith cause
24		to be mailed by certified or registered mail one of the copies
25		of such statement of charges, notices or process to the
26		defendant at its last known principal place of business, and

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1		shall keep a record of all statements of charges, notices and
2		process so served. Such service of statement of charges,
3		notices or process shall be sufficient provided they shall
4		have been so mailed and the defendant's receipt or receipt
5		issued by the post office with which the letter is certified or
6		registered, showing the name of the sender of the letter and
7		the name and address of the person to whom the letter is
8		addressed, and the affidavit of the person mailing such letter
9		showing a compliance herewith are filed with the Director in
10		the case of any statement of charges or notices, or with the
11		clerk of the court in which such action is pending in the case
12		of any process, on or before the date the defendant is required
13		to appear or within such further time as may be allowed.
14		(c) Service of statement of charges, notices and process
15		in any such proceeding, action or suit shall in addition to the
16		manner provided in paragraph (b) of this subsection be valid
17		if served upon any person within this State who on behalf of
18		such insurer is
19		(i) soliciting insurance; or
20		(ii) making, issuing or delivering any policies or
21		contracts of insurance; or
22		(iii) collecting or receiving in this State any
23		premium, membership fee, assessment or other consideration
24		for insurance; or
25		(iv) in any manner aiding or assisting in doing any of
26		the things enumerated in clauses (i), (ii) or (iii) of

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1		this paragraph;
2		and a copy of such statement of charges, notices or process is
3		sent within ten days thereafter by certified or registered
4		mail by or on behalf of the Director to the defendant at the
5		last known principal place of business of the defendant, and
6		the defendant's receipt, or the receipt issued by the post
7		office with which the letter is certified or registered,
8		showing the name of the sender of the letter, the name and
9		address of the person to whom the letter is addressed, and the
10		affidavit of the person mailing the same showing a compliance
11		herewith, are filed with the Director in the case of any
12		statement of charges or notices, or with the clerk of the court
13		in which such action is pending in the case of any process, on
14		or before the date the defendant is required to appear or
15		within such further time as the court may allow.
16		(d) No cease or desist order or judgment by default under
17		this section shall be entered until the expiration of thirty
18		days from the date of the filing of the affidavit of
19		compliance.
20		(e) Service of process and notice under the provisions of
21		this section shall be in addition to all other methods of
22		service provided by law, and nothing in this section shall
23		limit or prohibit the right to serve any statement of charges,
24		notices or process upon any insurer in any other manner now or
25		hereafter permitted by law.
26		(5) When used in this Act, "residents" shall mean and

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1		include person, partnership or corporation, domestic,
2		non-domestic, alien or foreign.
3		(Source: P.A. 83-598.)
4		(215 ILCS 5/123.3) (from Ch. 73, par. 735.3)
5		Sec. 123.3. Insurance Sales by Companies in Hazardous
6		Financial Condition Prohibited. Notwithstanding any other
7		provision of this Code, no unauthorized foreign or
8		non-domestic alien company officer, director, trustee, agent
9		or employee of such company may renew, issue, or deliver or
10		cause to be renewed, issued or delivered any policy, contract,
11		or certificate of insurance for which a premium is charged or
12		collected if the Director of Insurance has found that such
13		company is in a hazardous financial condition and such
14		officer, director, trustee, agent or employee is aware of such
15		finding.
16		If upon request of the Director, such company officer,
17		director, trustee or employee is unable or unwilling to submit
18		to the Director a copy of such unauthorized company's most
19		recent financial statement, such unwillingness or inability
20		shall be deemed prima facie evidence of a hazardous financial
21		condition.
22		However, a finding of hazardous financial condition does
23		not prevent the issuance or renewal of a policy when an insured
24		or owner exercises an option granted to him under an existing
25		policy to obtain new, renewed or converted insurance coverage.

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1		Any company officer, director, trustee, agent, or employee
2		of such company violating this Section shall be guilty of a
3		Class A misdemeanor.
4		(Source: P.A. 85-1139.)
5		(215 ILCS 5/123C-8) (from Ch. 73, par. 735C-8)
6		(Section scheduled to be repealed on January 1, 2027)
7		Sec. 123C-8. Merger, consolidation, plans of exchange and
8		reorganization.
9		A. The provisions of Article X shall apply to captive
10		insurance companies; provided, however, that:
11		(1) if the surviving or new company is to be a domestic
12		captive insurance company,
13		(a) the Director shall, in determining whether
14		such company meets the requirements set forth in
15		paragraph (b) of subsection (2) of Section 162, refer
16		only to the provisions of this Article VIIC and the
17		other provisions of Article X;
18		(b) the Director shall, in determining whether
19		such company meets the requirements of Sections 123C-3
20		and 123C-4, take into account the capital and surplus
21		of the company to be merged into the domestic captive
22		insurance company or the companies to be consolidated
23		into the domestic captive insurance company (but any
24		approval by the Director of such merger or
25		consolidation shall be contingent upon the receipt of

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1		such capital and surplus by the domestic captive
2		insurance company and satisfactory evidence thereof
3		being presented to the Director);
4		(c) notwithstanding the provisions of paragraph
5		(c) of subsection (1) of Section 166, such surviving
6		or new company shall have all of the rights,
7		privileges, immunities and powers and shall be subject
8		to all of the duties and liabilities granted or
9		imposed by this Article VIIC (and not by the entire
10		Code); and
11		(2) in the event that such merger or consolidation is
12		to be effected in conjunction with the formation and
13		licensing of a new domestic captive insurance company in
14		this State, the Director shall follow procedures for the
15		contemporaneous and expeditious review of the materials
16		presented to the Director for his approval of such
17		formation, licensing and merger or consolidation.
18		B. (1) Any domestic, foreign or non-domestic alien stock
19		company, mutual company, or reciprocal company, authorized or
20		which may be authorized to do business in this State, may
21		reorganize as a domestic captive insurance company under the
22		laws of this State, by complying with the provisions of
23		Article XII. Domestic companies are hereby authorized to
24		reorganize as domestic captive insurance companies.
25		(2) In the event that such reorganization is to be
26		effected in conjunction with the formation and licensing

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1		of a new captive insurance company in this State, the
2		Director shall follow procedures for the contemporaneous
3		and expeditious review of the materials presented to the
4		Director for his approval of such formation, licensing and
5		reorganization.
6		(Source: P.A. 85-131.)
7		(215 ILCS 5/126.1)
8		Sec. 126.1. Purpose and scope.
9		A. Purpose. The purpose of this Article is to protect the
10		interests of insureds by promoting insurer solvency and
11		financial strength. This will be accomplished through the
12		application of investment standards that facilitate a
13		reasonable balance of the following objectives:
14		(1) To preserve principal;
15		(2) To assure reasonable diversification as to type of
16		investment, issuer and credit quality; and
17		(3) To allow insurers to allocate investments in a
18		manner consistent with principles of prudent investment
19		management to achieve an adequate return so that
20		obligations to insureds are adequately met and financial
21		strength is sufficient to cover reasonably foreseeable
22		contingencies.
23		B. Scope. This Article shall apply only to investments and
24		investment practices of domestic insurers and United States
25		branches of non-domestic alien insurers entered through this

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1		State. This Article shall not apply to separate accounts of an
2		insurer except to the extent that the provisions of Article
3		XIV 1/2 so provide.
4		(Source: P.A. 90-418, eff. 8-15-97.)
5		(215 ILCS 5/126.12)
6		Sec. 126.12. Insurer investment pools.
7		A. An insurer may acquire investments in investment pools
8		that:
9		(1) Invest only in:
10		(a) Obligations that are rated 1 or 2 by the SVO or
11		have an equivalent of an SVO 1 or 2 rating (or, in the
12		absence of a 1 or 2 rating or equivalent rating, the
13		issuer has outstanding obligations with an SVO 1 or 2
14		or equivalent rating) by a nationally recognized
15		statistical rating organization recognized by the SVO
16		and have:
17		(i) A remaining maturity of 397 days or less
18		or a put that entitles the holder to receive the
19		principal amount of the obligation which put may
20		be exercised through maturity at specified
21		intervals not exceeding 397 days; or
22		(ii) A remaining maturity of 3 years or less
23		and a floating interest rate that resets no less
24		frequently than quarterly on the basis of a
25		current short-term index (federal funds, prime

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1		rate, treasury bills, London InterBank Offered
2		Rate (LIBOR) or commercial paper) and is subject
3		to no maximum limit, if the obligations do not
4		have an interest rate that varies inversely to
5		market interest rate changes;
6		(b) Government money market mutual funds or class
7		one money market mutual funds; or
8		(c) Securities lending, repurchase, and reverse
9		repurchase transactions that meet all the requirements
10		of Section 126.16, except the quantitative limitations
11		of Section 126.16D; or
12		(2) Invest only in investments which an insurer may
13		acquire under this Article, if the insurer's proportionate
14		interest in the amount invested in these investments when
15		combined with amount of such investments made directly or
16		indirectly through an investment subsidiary or other
17		insurer investment pool permitted under this subsection
18		A(2) does not exceed the applicable limits of this Article
19		for such investments.
20		B. For an investment in an investment pool to be qualified
21		under this Article, the investment pool shall not:
22		(1) Acquire securities issued, assumed, guaranteed or
23		insured by the insurer or an affiliate of the insurer;
24		(2) Borrow or incur any indebtedness for borrowed
25		money, except for securities lending and reverse
26		repurchase transactions that meet the requirements of

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1		Section 126.16 except the quantitative limitations of
2		Section 126.16D; or
3		(3) Acquire an investment if, as a result of such
4		transaction, the aggregate value of securities then loaned
5		or sold to, purchased from or invested in any one business
6		entity under this Section would exceed 10% of the total
7		assets of the investment pool.
8		C. The limitations of Section 126.10A shall not apply to
9		an insurer's investment in an investment pool, however an
10		insurer shall not acquire an investment in an investment pool
11		under this Section if, as a result of and after giving effect
12		to the investment, the aggregate amount of investments then
13		held by the insurer under this Section:
14		(1) In all investment pools investing in investments
15		permitted under subsection A(2) of this Section would
16		exceed 25% of its admitted assets; or
17		(2) In all investment pools would exceed 35% of its
18		admitted assets.
19		D. For an investment in an investment pool to be qualified
20		under this Article, the manager of the investment pool shall:
21		(1) Be organized under the laws of the United States
22		or a state and designated as the pool manager in a pooling
23		agreement;
24		(2) Be the insurer, an affiliated insurer or a
25		business entity affiliated with the insurer, a qualified
26		bank, a business entity registered under the Investment

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1		Advisers Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended
2		or, in the case of a reciprocal insurer or interinsurance
3		exchange, its attorney-in-fact, or in the case of a United
4		States branch of a non-domestic an alien insurer, its
5		United States manager or an affiliate or subsidiary of its
6		United States manager;
7		(3) Be responsible for the compilation and maintenance
8		of detailed accounting records setting forth:
9		(a) The cash receipts and disbursements reflecting
10		each participant's proportionate investment in the
11		investment pool;
12		(b) A complete description of all underlying
13		assets of the investment pool (including amount,
14		interest rate, maturity date (if any) and other
15		appropriate designations); and
16		(c) Other records which, on a daily basis, allow
17		third parties to verify each participant's investment
18		in the investment pool; and
19		(4) Maintain the assets of the investment pool in one
20		or more accounts, in the name of or on behalf of the
21		investment pool, under a custody agreement with a
22		qualified bank. The custody agreement shall:
23		(a) State and recognize the claims and rights of
24		each participant;
25		(b) Acknowledge that the underlying assets of the
26		investment pool are held solely for the benefit of

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1		each participant in proportion to the aggregate amount
2		of its investments in the investment pool; and
3		(c) Contain an agreement that the underlying
4		assets of the investment pool shall not be commingled
5		with the general assets of the custodian qualified
6		bank or any other person.
7		E. The pooling agreement for each investment pool shall be
8		in writing and shall provide that:
9		(1) An insurer and its affiliated insurers or, in the
10		case of an investment pool investing solely in investments
11		permitted under subsection A(1) of this Section, the
12		insurer and its subsidiaries, affiliates or any pension or
13		profit sharing plan of the insurer, its subsidiaries and
14		affiliates or, in the case of a United States branch of a
15		non-domestic an alien insurer, affiliates or subsidiaries
16		of its United States manager, shall, at all times, hold
17		100% of the interests in the investment pool;
18		(2) The underlying assets of the investment pool shall
19		not be commingled with the general assets of the pool
20		manager or any other person;
21		(3) In proportion to the aggregate amount of each pool
22		participant's interest in the investment pool:
23		(a) Each participant owns an undivided interest in
24		the underlying assets of the investment pool; and
25		(b) The underlying assets of the investment pool
26		are held solely for the benefit of each participant;

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1		(4) A participant, or in the event of the
2		participant's insolvency, bankruptcy or receivership, its
3		trustee, receiver or other successor-in-interest, may
4		withdraw all or any portion of its investment from the
5		investment pool under the terms of the pooling agreement;
6		(5) Withdrawals may be made on demand without penalty
7		or other assessment on any business day, but settlement of
8		funds shall occur within a reasonable and customary period
9		thereafter not to exceed 10 business days. Distributions
10		under this paragraph shall be calculated in each case net
11		of all then applicable fees and expenses of the investment
12		pool. The pooling agreement shall provide that the pool
13		manager shall distribute to a participant, at the
14		discretion of the pool manager:
15		(a) In cash, the then fair market value of the
16		participant's pro rata share of each underlying asset
17		of the investment pool;
18		(b) In kind, a pro rata share of each underlying
19		asset; or
20		(c) In a combination of cash and in kind
21		distributions, a pro rata share in each underlying
22		asset; and
23		(6) The pool manager shall make the records of the
24		investment pool available for inspection by the Director.
25		F. Except for the formation of the investment pool,
26		transactions and between a domestic insurer and an affiliated

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1		insurer investment pool shall not be subject to the
2		requirements of Section 131.20a of this Code.
3		(Source: P.A. 100-201, eff. 8-18-17.)
4		(215 ILCS 5/126.25)
5		Sec. 126.25. Insurer investment pools.
6		A. An insurer may acquire investments in investment pools
7		that:
8		(1) Invest only in:
9		(a) Obligations that are rated 1 or 2 by the SVO or
10		have an equivalent of an SVO 1 or 2 rating (or, in the
11		absence of a 1 or 2 rating or equivalent rating, the
12		issuer has outstanding obligations with an SVO 1 or 2
13		or equivalent rating) by a nationally recognized
14		statistical rating organization recognized by the SVO
15		and have:
16		(i) A remaining maturity of 397 days or less
17		or a put that entitles the holder to receive the
18		principal amount of the obligation which put may
19		be exercised through maturity at specified
20		intervals not exceeding 397 days; or
21		(ii) A remaining maturity of 3 years or less
22		and a floating interest rate that resets no less
23		frequently than quarterly on the basis of a
24		current short-term index (federal funds, prime
25		rate, treasury bills, London InterBank Offered

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1		Rate (LIBOR) or commercial paper) and is subject
2		to no maximum limit, if the obligations do not
3		have an interest rate that varies inversely to
4		market interest rate changes;
5		(b) Government money market mutual funds or class
6		one money market mutual funds; or
7		(c) Securities lending, repurchase, and reverse
8		repurchase, transactions that meet all the
9		requirements of Section 126.29, except the
10		quantitative limitations of Section 126.29D; or
11		(2) Invest only in investments which an insurer may
12		acquire under this Article, if the insurer's proportionate
13		interest in the amount invested in these investments when
14		combined with amounts of such investments made directly or
15		indirectly through an investment subsidiary or other
16		insurer investment pool permitted under this subsection
17		A(2) does not exceed the applicable limits of this Article
18		for such investments.
19		B. For an investment in an investment pool to be qualified
20		under this Article, the investment pool shall not:
21		(1) Acquire securities issued, assumed, guaranteed, or
22		insured by the insurer or an affiliate of the insurer;
23		(2) Borrow or incur any indebtedness for borrowed
24		money, except for securities lending and reverse
25		repurchase transactions that meet the requirements of
26		Section 126.29 except the quantitative limitations of

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1		Section 126.29D; or
2		(3) Acquire an investment if, as a result of such
3		transaction, the aggregate value of securities then loaned
4		or sold to, purchased from or invested in any one business
5		entity under this Section would exceed 10% of the total
6		assets of the investment pool.
7		C. The limitations of Section 126.23A shall not apply to
8		an insurer's investment in an investment pool, however an
9		insurer shall not acquire an investment in an investment pool
10		under this Section if, as a result of and after giving effect
11		to the investment, the aggregate amount of investments then
12		held by the insurer under this Section:
13		(1) In all investment pools investing in investments
14		permitted under subsection A(2) of this Section would
15		exceed 25% of its admitted assets; or
16		(2) In all investment pools would exceed 40% of its
17		admitted assets.
18		D. For an investment in an investment pool to be qualified
19		under this Article, the manager of the investment pool shall:
20		(1) Be organized under the laws of the United States
21		or a state and designated as the pool manager in a pooling
22		agreement;
23		(2) Be the insurer, an affiliated insurer or a
24		business entity affiliated with the insurer, a qualified
25		bank, a business entity registered under the Investment
26		Advisers Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended

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1		or, in the case of a reciprocal insurer or interinsurance
2		exchange, its attorney-in-fact, or in the case of a United
3		States branch of a non-domestic an alien insurer, its
4		United States manager or an affiliate or subsidiary of its
5		United States manager;
6		(3) Be responsible for the compilation and maintenance
7		of detailed accounting records setting forth:
8		(a) The cash receipts and disbursements reflecting
9		each participant's proportionate investment in the
10		investment pool;
11		(b) A complete description of all underlying
12		assets of the investment pool (including amount,
13		interest rate, maturity date (if any) and other
14		appropriate designations); and
15		(c) Other records which, on a daily basis, allow
16		third parties to verify each participant's investment
17		in the investment pool; and
18		(4) Maintain the assets of the investment pool in one
19		or more accounts, in the name of or on behalf of the
20		investment pool, under a custody agreement with a
21		qualified bank. The custody agreement shall:
22		(a) State and recognize the claims and rights of
23		each participant;
24		(b) Acknowledge that the underlying assets of the
25		investment pool are held solely for the benefit of
26		each participant in proportion to the aggregate amount

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1		of its investments in the investment pool; and
2		(c) Contain an agreement that the underlying
3		assets of the investment pool shall not be commingled
4		with the general assets of the custodian qualified
5		bank or any other person.
6		E. The pooling agreement for each investment pool shall be
7		in writing and shall provide that:
8		(1) An insurer and its affiliated insurers or, in the
9		case of an investment pool investing solely in investments
10		permitted under subsection A(1) of this Section, the
11		insurer and its subsidiaries, affiliates or any pension or
12		profit sharing plan of the insurer, its subsidiaries and
13		affiliates or, in the case of a United States branch of a
14		non-domestic an alien insurer, affiliates or subsidiaries
15		of its United States manager, shall, at all times, hold
16		100% of the interests in the investment pool;
17		(2) The underlying assets of the investment pool shall
18		not be commingled with the general assets of the pool
19		manager or any other person;
20		(3) In proportion to the aggregate amount of each pool
21		participant's interest in the investment pool:
22		(a) Each participant owns an undivided interest in
23		the underlying assets of the investment pool; and
24		(b) The underlying assets of the investment pool
25		are held solely for the benefit of each participant;
26		(4) A participant, or in the event of the

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1		participant's insolvency, bankruptcy or receivership, its
2		trustee, receiver or other successor-in-interest, may
3		withdraw all or any portion of its investment from the
4		investment pool under the terms of the pooling agreement;
5		(5) Withdrawals may be made on demand without penalty
6		or other assessment on any business day, but settlement of
7		funds shall occur within a reasonable and customary period
8		thereafter not to exceed 10 business days. Distributions
9		under this paragraph shall be calculated in each case net
10		of all then applicable fees and expenses of the investment
11		pool. The pooling agreement shall provide that the pool
12		manager shall distribute to a participant, at the
13		discretion of the pool manager:
14		(a) In cash, the then fair market value of the
15		participant's pro rata share of each underlying asset
16		of the investment pool;
17		(b) In kind, a pro rata share of each underlying
18		asset; or
19		(c) In a combination of cash and in kind
20		distributions, a pro rata share in each underlying
21		asset; and
22		(6) The pool manager shall make the records of the
23		investment pool available for inspection by the Director.
24		F. Except for the formation of the investment pool,
25		transactions between a domestic insurer and an affiliated
26		insurer investment pool shall not be subject to the

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1		requirements of Section 131.20a of this Code.
2		(Source: P.A. 100-201, eff. 8-18-17.)
3		(215 ILCS 5/131.13) (from Ch. 73, par. 743.13)
4		Sec. 131.13. Registration of companies. Every company
5		which is authorized to do business in this State and which is a
6		member of an insurance holding company system must register
7		with the Director, except a foreign or non-domestic alien
8		company subject to registration requirements and standards
9		adopted by statute or regulation in the jurisdiction of its
10		domicile which are substantially similar to those contained in
11		this section and Sections 131.14 through 131.20a. Any company
12		which is subject to registration under this section must
13		register within 60 days after the effective date of this
14		Article or 15 days after it becomes subject to registration,
15		whichever is later, unless the Director for good cause shown
16		extends the time for registration, and then within such
17		extended time. The Director may require any authorized company
18		which is a member of a holding company system which is not
19		subject to registration under this section to furnish a copy
20		of the registration statement or other information filed by
21		such company with the insurance regulatory authority of its
22		domiciliary jurisdiction.
23		(Source: P.A. 98-609, eff. 1-1-14.)
24		(215 ILCS 5/132.3) (from Ch. 73, par. 744.3)

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1		Sec. 132.3. Authority, scope, and scheduling of
2		examinations.
3		(a) The Director or any of his examiners may conduct an
4		examination of any company as often as the Director, in his
5		sole discretion, deems appropriate, but shall, at a minimum,
6		conduct an examination of every insurer authorized or licensed
7		in this State not less frequently than once every 5 years. In
8		scheduling and determining the nature, scope, and frequency of
9		the examinations, the Director shall consider the results of
10		financial statement analyses and ratios, changes in management
11		or ownership, actuarial opinions, reports of independent
12		certified public accountants and other criteria set forth in
13		the Examiners' Handbook adopted by the National Association of
14		Insurance Commissioners and in effect when the Director
15		exercises discretion under this subsection.
16		(b) For purposes of completing an examination of any
17		company, the Director may examine or investigate any person,
18		or the business of any person, insofar as the examination or
19		investigation is, in the sole discretion of the Director,
20		necessary or material to the examination of the company.
21		(c) In lieu of an examination of any foreign or
22		non-domestic alien insurer authorized or licensed in this
23		State, the Director may accept an examination report on the
24		company as prepared by the insurance department for the
25		company's state of domicile or port-of-entry state until
26		January 1, 1994. Thereafter, those reports may only be

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1		accepted if (1) the insurance department was at the time of the
2		examination accredited under the National Association of
3		Insurance Commissioners' Financial Regulation Standards and
4		Accreditation Program, (2) the examination is performed under
5		the supervision of an accredited insurance department or with
6		the participation of one or more examiners who are employed by
7		an accredited state insurance department, and who, after a
8		review of the examination work papers and report, state under
9		oath that the examination was performed in a manner consistent
10		with the standards and procedures required by their insurance
11		department, or (3) the Director otherwise determines that the
12		examination was performed in a manner substantially similar to
13		the standards and procedures required by Sections 132.1
14		through 132.6 of this Code.
15		(Source: P.A. 89-97, eff. 7-7-95.)
16		(215 ILCS 5/133) (from Ch. 73, par. 745)
17		Sec. 133. Books, records, accounts and vouchers.
18		(1) Every domestic company shall keep its books, records,
19		documents, accounts and vouchers in such manner that its
20		financial condition, affairs and operations can be ascertained
21		and so that its financial statements filed with the Director
22		can be readily verified and its compliance with the law
23		determined and may cause any or all such books, records,
24		documents, accounts and vouchers to be photographed or
25		reproduced on film. Any such photographs, microphotographs,

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1		optical imaging, or film reproductions of any original books,
2		records, documents, accounts and vouchers shall for all
3		purposes be considered the same as the originals thereof and a
4		transcript, exemplification or certified copy of any such
5		photograph, microphotograph, optical imaging, or film
6		reproduction shall for all purposes be deemed to be a
7		transcript, exemplification or certified copy of the original.
8		Any original so reproduced may thereafter be disposed of or
9		destroyed if provision is made for preserving and examining
10		such reproductions.
11		(2) All such original books, records, documents, accounts
12		and vouchers, or such reproductions thereof, of the home
13		office of any domestic company or of any principal United
14		States office of a foreign or non-domestic alien company
15		located in this State shall be preserved and kept available in
16		this State for the purpose of examination and until authority
17		to destroy or otherwise dispose of such records is secured
18		from the Director. Such original records may, however, be kept
19		and maintained outside this State if, according to a plan
20		adopted by the company's board of directors and approved by
21		the Director, it maintains suitable records in lieu thereof.
22		Every domestic company shall keep its securities within the
23		State of Illinois except where:
24		(a) on deposit with other states of the United States
25		of America, or political subdivision thereof; or
26		(b) on deposit with foreign countries where the

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1		company is licensed to transact an insurance business; or
2		(c) where requisite for the normal transaction of the
3		company's business and approved by the Director.
4		(3) Any domestic company may maintain with a corporation,
5		qualified to administer trusts in this State under the
6		Corporate Fiduciary Act and that has an office in this State at
7		which the account is maintained, for its securities, a limited
8		agency, custodial or depository account, or other type of
9		account for the safekeeping of those securities, collecting
10		the income from those securities and providing supportive
11		accounting services relating to such safekeeping and
12		collection, provided, the domestic company maintains full
13		investment discretion over those securities. Such a
14		corporation in safekeeping such securities shall have all the
15		powers, rights, duties and responsibilities as it has for
16		holding securities in its fiduciary accounts under the
17		Securities in Fiduciary Accounts Act.
18		(4) Any director, officer, agent or employee of any
19		company who destroys any such books, records or documents
20		without the authority of the Director in violation of this
21		section or who fails to keep the books, records, documents,
22		accounts and vouchers required by this section shall be guilty
23		of a business offense and shall be fined not more than
24		$5000.00.
25		(Source: P.A. 88-364; 89-437, eff. 12-15-95.)

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1		(215 ILCS 5/136) (from Ch. 73, par. 748)
2		Sec. 136. Annual statement.
3		(1) Every company authorized to do business in this State
4		or accredited by this State shall submit to the Director by
5		March 1st in each year its financial statement for the year
6		ending December 31st immediately preceding in such manner and
7		in such form as prescribed by the Director, which shall
8		conform substantially to the form of statement adopted by the
9		National Association of Insurance Commissioners. Unless the
10		Director provides otherwise, the annual statement is to be
11		prepared in accordance with the annual statement instructions
12		and the Accounting Practices and Procedures Manual adopted by
13		the National Association of Insurance Commissioners. The
14		Director shall have power to make such modifications and
15		additions in this form as he may deem desirable or necessary to
16		ascertain the condition and affairs of the company. The
17		Director shall have authority to extend the time for filing
18		any statement by any company for reasons which he considers
19		good and sufficient. In every statement the admitted assets
20		shall be shown at the actual values as of the last day of the
21		preceding year, in accordance with Section 126.7. The
22		statement shall be verified by oaths of the president and
23		secretary of the company or, in their absence, by 2 other
24		principal officers. In addition, any company may be required
25		by the Director, when he considers that action to be necessary
26		and appropriate for the protection of policyholders,

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1		creditors, shareholders, or claimants, to file, within 60 days
2		after mailing to the company a notice that such is required, a
3		supplemental summary statement as of the last day of any
4		calendar month occurring during the 100 days next preceding
5		the mailing of such notice designated by him on forms
6		prescribed and furnished by the Director. The Director may
7		require supplemental summary statements to be certified by an
8		independent actuary deemed competent by the Director or by an
9		independent certified public accountant.
10		(2) The statement of a non-domestic an alien company shall
11		embrace only its condition and transactions in the United
12		States and shall be verified by the oaths of its resident
13		manager or principal representative in the United States,
14		except that in the case of any life company organized under the
15		laws of Canada or any province thereof, the statement may be
16		verified by the oaths of any of its principal officers
17		designated for that purpose by its board of directors.
18		(3) For the information of the public generally the
19		Director shall cause an abstract of the information contained
20		in the annual statement to be made available to the public as
21		soon as practicable after filing with the Department, by
22		printing those abstracts in pamphlet tabular form for free
23		general distribution by the Department, or by such other
24		publication in the city of Springfield or in the city of
25		Chicago as may be reasonably necessary more fully to inform
26		the public of the financial condition of companies transacting

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1		business in this State.
2		(4) Each domestic, foreign, and non-domestic alien insurer
3		authorized to do business in this State or accredited by this
4		State shall participate in the National Association of
5		Insurance Commissioners' Insurance Regulatory Information
6		System, including the payment of all fees and charges of the
7		system. Each company shall, on or before March 1 of each year,
8		file with the National Association of Insurance Commissioners
9		a copy of its annual financial statement along with any
10		additional filings prescribed by the Director for the
11		preceding year. The statement filed with the National
12		Association of Insurance Commissioners shall be in the same
13		format and scope as that required by this Code and shall
14		include a signed jurat page and actuarial certification. Any
15		amendments and addendums to the annual statement shall also be
16		filed with the National Association of Insurance
17		Commissioners. Each company shall also file with the National
18		Association of Insurance Commissioners annual and quarterly
19		financial statement information in computer readable format as
20		required by the Insurance Regulatory Information System.
21		Failure of a company to file financial statement information
22		in computer readable format shall subject the company to the
23		provisions of Section 139.
24		(5) All financial analysis ratios and examination synopsis
25		concerning insurance companies that are submitted to the
26		Director by the National Association of Insurance

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1		Commissioners' Insurance Regulatory Information System are
2		confidential and may not be disclosed by the Director.
3		(6) Every property and casualty insurance company doing
4		business in this State, unless otherwise exempted by the
5		Director, shall annually submit the opinion of an appointed
6		actuary entitled "Statement of Actuarial Opinion". This
7		opinion shall be filed in accordance with the appropriate
8		National Association of Insurance Commissioners Property and
9		Casualty Annual Statement Instructions.
10		(a) Every property and casualty insurance company
11		domiciled in this State that is required to submit a
12		Statement of Actuarial Opinion shall annually submit an
13		Actuarial Opinion Summary, written by the company's
14		appointed actuary. This Actuarial Opinion Summary shall be
15		filed in accordance with the appropriate National
16		Association of Insurance Commissioners Property and
17		Casualty Annual Statement Instructions and shall be
18		considered as a document supporting the Actuarial Opinion
19		required in this subsection (6). Each foreign and
20		non-domestic alien property and casualty company
21		authorized to do business in this State shall provide the
22		Actuarial Opinion Summary upon request.
23		(b) An Actuarial Report and underlying workpapers as
24		required by the appropriate National Association of
25		Insurance Commissioners Property and Casualty Annual
26		Statement Instructions shall be prepared to support each

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1		Actuarial Opinion. If the insurance company fails to
2		provide a supporting Actuarial Report or workpapers at the
3		request of the Director or the Director determines that
4		the supporting Actuarial Report or workpapers provided by
5		the insurance company is otherwise unacceptable to the
6		Director, the Director may engage a qualified actuary at
7		the expense of the company to review the opinion and the
8		basis for the opinion and prepare the supporting Actuarial
9		Report or workpapers.
10		(c) The appointed actuary shall not be liable for
11		damages to any person (other than the insurance company
12		and the Director) for any act, error, omission, decision,
13		or conduct with respect to the actuary's opinion, except
14		in cases of fraud or willful misconduct on the part of the
15		appointed actuary.
16		(d) The Statement of Actuarial Opinion shall be
17		provided with the Annual Statement in accordance with the
18		appropriate National Association of Insurance
19		Commissioners Property and Casualty Annual Statement
20		Instructions and shall be treated as a public document.
21		Documents, materials, or other information in the
22		possession or control of the Director that are considered
23		an Actuarial Report, workpapers, or Actuarial Opinion
24		Summary provided in support of the opinion, and any other
25		material provided by the company to the Director in
26		connection with the Actuarial Report, workpapers or

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1		Actuarial Opinion Summary, must be given confidential
2		treatment, are not subject to subpoena, and may not be
3		made public by the Director or any other persons. This
4		paragraph (d) shall not be construed to limit the
5		Director's authority to release the documents to the
6		Actuarial Board for Counseling and Discipline (ABCD), so
7		long as the material is required for the purpose of
8		professional disciplinary proceedings and that the ABCD
9		establishes procedures satisfactory to the Director for
10		preserving the confidentiality of the documents, nor shall
11		this paragraph (d) be construed to limit the Director's
12		authority to use the documents, materials or other
13		information in furtherance of any regulatory or legal
14		action brought as part of the Director's official duties.
15		Neither the Director nor any person who received
16		documents, materials, or other information while acting
17		under the authority of the Director shall be permitted or
18		required to testify in any private civil action concerning
19		any confidential documents, materials, or information
20		subject to this subsection (6). Except where another
21		provision of this Code expressly prohibits a disclosure of
22		confidential information to the specific officials or
23		organizations described in this subsection, the Director
24		may:
25		(i) share documents, materials, or other
26		information, including the confidential and privileged

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1		documents, materials or information subject to this
2		paragraph (d) with the insurance department of any
3		other state or country or with law enforcement
4		officials of this or any other state or agency of the
5		federal government at any time, as long as the agency
6		or office receiving the document, material, or other
7		information agrees in writing to hold it confidential
8		and in a manner consistent with this Code;
9		(ii) receive documents, materials, or information,
10		including otherwise confidential and privileged
11		documents, materials, or information, from the
12		National Association of Insurance Commissioners and
13		its affiliates and subsidiaries, and from regulatory
14		and law enforcement officials of other foreign or
15		domestic jurisdictions, and shall maintain as
16		confidential or privileged any document, material, or
17		information received with notice or the understanding
18		that it is confidential or privileged under the laws
19		of the jurisdiction that is the source of the
20		document, material, or information; and
21		(iii) enter into agreements governing sharing and
22		use of information consistent with paragraph (d).
23		(e) No waiver of any applicable privilege or claim of
24		confidentiality in the documents, materials or information
25		shall occur as a result of disclosure to the Director
26		under this Section or as a result of sharing as authorized

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1		in subparagraphs (i), (ii), and (iii) of paragraph (d) of
2		subsection (6) of this Section. All 2008 Annual
3		Statements, which are filed in 2009, and all subsequent
4		Annual Statement filings shall be done in accordance with
5		subsection (6) of this Section.
6		(Source: P.A. 96-145, eff. 8-7-09; 97-486, eff. 1-1-12.)
7		(215 ILCS 5/141a) (from Ch. 73, par. 753a)
8		Sec. 141a. Managing general agents and retrospective
9		compensation agreements.
10		(a) As used in this Section, the following terms have the
11		following meanings:
12		"Actuary" means a person who is a member in good standing
13		of the American Academy of Actuaries.
14		"Gross direct written premium" means direct premium
15		including policy and membership fees, net of returns and
16		cancellations, and prior to any cessions.
17		"Insurer" means any person duly licensed in this State as
18		an insurance company pursuant to Articles II, III, III 1/2,
19		IV, V, VI, and XVII of this Code.
20		"Managing general agent" means any person, firm,
21		association, or corporation, either separately or together
22		with affiliates, that:
23		(1) manages all or part of the insurance business of
24		an insurer (including the management of a separate
25		division, department, or underwriting office), and

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1		(2) acts as an agent for the insurer whether known as a
2		managing general agent, manager, or other similar term,
3		and
4		(3) with or without the authority produces, directly
5		or indirectly, and underwrites:
6		(A) within any one calendar quarter, an amount of
7		gross direct written premium equal to or more than 5%
8		of the policyholders' surplus as reported in the
9		insurer's last annual statement, or
10		(B) within any one calendar year, an amount of
11		gross direct written premium equal to or more than 8%
12		of the policyholders' surplus as reported in the
13		insurer's last annual statement, and either
14		(4) has the authority to bind the company in
15		settlement of individual claims in amounts in excess of
16		$500, or
17		(5) has the authority to negotiate reinsurance on
18		behalf of the insurer.
19		Notwithstanding the provisions of items (1) through (5),
20		the following persons shall not be considered to be managing
21		general agents for the purposes of this Code:
22		(1) An employee of the insurer;
23		(2) A U.S. manager of the United States branch of a
24		non-domestic an alien insurer;
25		(3) An underwriting manager who, pursuant to a
26		contract meeting the standards of Section 141.1 manages

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1		all or part of the insurance operations of the insurer, is
2		affiliated with the insurer, subject to Article VIII 1/2,
3		and whose compensation is not based on the volume of
4		premiums written;
5		(4) The attorney or the attorney in fact authorized
6		and acting for or on behalf of the subscriber
7		policyholders of a reciprocal or inter-insurance exchange,
8		under the terms of the subscription agreement, power of
9		attorney, or policy of insurance or the attorney in fact
10		for any Lloyds organization licensed in this State.
11		"Retrospective compensation agreement" means any
12		arrangement, agreement, or contract having as its purpose the
13		actual or constructive retention by the insurer of a fixed
14		proportion of the gross premiums, with the balance of the
15		premiums, retained actually or constructively by the agent or
16		the producer of the business, who assumes to pay therefrom all
17		losses, all subordinate commission, loss adjustment expenses,
18		and his profit, if any, with other provisions of the
19		arrangement, agreement, or contract being auxiliary or
20		incidental to that purpose.
21		"Underwrite" means to accept or reject risk on behalf of
22		the insurer.
23		(b) Licensure of managing general agents.
24		(1) No person, firm, association, or corporation shall
25		act in the capacity of a managing general agent with
26		respect to risks located in this State for an insurer

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1		licensed in this State unless the person is a licensed
2		producer or a registered firm in this State under Article
3		XXXI of this Code or a licensed third party administrator
4		in this State under Article XXXI 1/4 of this Code.
5		(2) No person, firm, association, or corporation shall
6		act in the capacity of a managing general agent with
7		respect to risks located outside this State for an insurer
8		domiciled in this State unless the person is a licensed
9		producer or a registered firm in this State under Article
10		XXXI of this Code or a licensed third party administrator
11		in this State under Article XXXI 1/4 of this Code.
12		(3) The managing general agent must provide a surety
13		bond for the benefit of the insurer in an amount equal to
14		the greater of $100,000 or 5% of the gross direct written
15		premium underwritten by the managing general agent on
16		behalf of the insurer. The bond shall provide for a
17		discovery period and prior notification of cancellation in
18		accordance with the rules of the Department unless
19		otherwise approved in writing by the Director.
20		(4) The managing general agent must maintain an errors
21		and omissions policy for the benefit of the insurer with
22		coverage in an amount equal to the greater of $1,000,000
23		or 5% of the gross direct written premium underwritten by
24		the managing general agent on behalf of the insurer.
25		(5) Evidence of the existence of the bond and the
26		errors and omissions policy must be made available to the

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1		Director upon his request.
2		(c) No person, firm, association, or corporation acting in
3		the capacity of a managing general agent shall place business
4		with an insurer unless there is in force a written contract
5		between the parties that sets forth the responsibilities of
6		each party, that, if both parties share responsibility for a
7		particular function, specifies the division of responsibility,
8		and that contains the following minimum provisions:
9		(1) The insurer may terminate the contract for cause
10		upon written notice to the managing general agent. The
11		insurer may suspend the underwriting authority of the
12		managing general agent during the pendency of any dispute
13		regarding the cause for termination.
14		(2) The managing general agent shall render accounts
15		to the insurer detailing all transactions and remit all
16		funds due under the contract to the insurer on not less
17		than a monthly basis.
18		(3) All funds collected for the account of an insurer
19		shall be held by the managing general agent in a fiduciary
20		capacity in a bank that is a federally or State chartered
21		bank and that is a member of the Federal Deposit Insurance
22		Corporation. This account shall be used for all payments
23		on behalf of the insurer; however, the managing general
24		agent shall not have authority to draw on any other
25		accounts of the insurer. The managing general agent may
26		retain no more than 3 months estimated claims payments and

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1		allocated loss adjustment expenses.
2		(4) Separate records of business written by the
3		managing general agent will be maintained. The insurer
4		shall have access to and the right to copy all accounts and
5		records related to its business in a form usable by the
6		insurer, and the Director shall have access to all books,
7		bank accounts, and records of the managing general agent
8		in a form usable to the Director.
9		(5) The contract may not be assigned in whole or part
10		by the managing general agent.
11		(6) The managing general agent shall provide to the
12		company audited financial statements required under
13		paragraph (1) of subsection (d).
14		(7) That appropriate underwriting guidelines be
15		followed, which guidelines shall stipulate the following:
16		(A) the maximum annual premium volume;
17		(B) the basis of the rates to be charged;
18		(C) the types of risks that may be written;
19		(D) maximum limits of liability;
20		(E) applicable exclusions;
21		(F) territorial limitations;
22		(G) policy cancellation provisions; and
23		(H) the maximum policy period.
24		(8) The insurer shall have the right to: (i) cancel or
25		nonrenew any policy of insurance subject to applicable
26		laws and regulations concerning those actions; and (ii)

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1		require cancellation of any subproducer's contract after
2		appropriate notice.
3		(9) If the contract permits the managing general agent
4		to settle claims on behalf of the insurer:
5		(A) all claims must be reported to the company in a
6		timely manner.
7		(B) a copy of the claim file must be sent to the
8		insurer at its request or as soon as it becomes known
9		that the claim:
10		(i) has the potential to exceed an amount
11		determined by the company;
12		(ii) involves a coverage dispute;
13		(iii) may exceed the managing general agent's
14		claims settlement authority;
15		(iv) is open for more than 6 months; or
16		(v) is closed by payment of an amount set by
17		the company.
18		(C) all claim files will be the joint property of
19		the insurer and the managing general agent. However,
20		upon an order of liquidation of the insurer, the files
21		shall become the sole property of the insurer or its
22		estate; the managing general agent shall have
23		reasonable access to and the right to copy the files on
24		a timely basis.
25		(D) any settlement authority granted to the
26		managing general agent may be terminated for cause

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1		upon the insurer's written notice to the managing
2		general agent or upon the termination of the contract.
3		The insurer may suspend the settlement authority
4		during the pendency of any dispute regarding the cause
5		for termination.
6		(10) Where electronic claims files are in existence,
7		the contract must address the timely transmission of the
8		data.
9		(11) If the contract provides for a sharing of interim
10		profits by the managing general agent and the managing
11		general agent has the authority to determine the amount of
12		the interim profits by establishing loss reserves,
13		controlling claim payments, or by any other manner,
14		interim profits will not be paid to the managing general
15		agent until one year after they are earned for property
16		insurance business and until 5 years after they are earned
17		on casualty business and in either case, not until the
18		profits have been verified.
19		(12) The managing general agent shall not:
20		(A) Bind reinsurance or retrocessions on behalf of
21		the insurer, except that the managing general agent
22		may bind facultative reinsurance contracts under
23		obligatory facultative agreements if the contract with
24		the insurer contains reinsurance underwriting
25		guidelines including, for both reinsurance assumed and
26		ceded, a list of reinsurers with which automatic

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1		agreements are in effect, the coverages and amounts or
2		percentages that may be reinsured, and commission
3		schedules.
4		(B) Appoint any producer without assuring that the
5		producer is lawfully licensed to transact the type of
6		insurance for which he is appointed.
7		(C) Without prior approval of the insurer, pay or
8		commit the insurer to pay a claim over a specified
9		amount, net of reinsurance, that shall not exceed 1%
10		of the insurer's policyholders' surplus as of December
11		31 of the last completed calendar year.
12		(D) Collect any payment from a reinsurer or commit
13		the insurer to any claim settlement with a reinsurer
14		without prior approval of the insurer. If prior
15		approval is given, a report must be promptly forwarded
16		to the insurer.
17		(E) Permit its subproducer to serve on its board
18		of directors.
19		(F) Employ an individual who is also employed by
20		the insurer.
21		(13) The contract may not be written for a term of
22		greater than 5 years.
23		(d) Insurers shall have the following duties:
24		(1) The insurer shall have on file the managing
25		general agent's audited financial statements as of the end
26		of the most recent fiscal year prepared in accordance with

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1		Generally Accepted Accounting Principles. The insurer
2		shall notify the Director if the auditor's opinion on
3		those statements is other than an unqualified opinion.
4		That notice shall be given to the Director within 10 days
5		of receiving the audited financial statements or becoming
6		aware that such opinion has been given.
7		(2) If a managing general agent establishes loss
8		reserves, the insurer shall annually obtain the opinion of
9		an actuary attesting to the adequacy of loss reserves
10		established for losses incurred and outstanding on
11		business produced by the managing general agent, in
12		addition to any other required loss reserve certification.
13		(3) The insurer shall periodically (at least
14		semiannually) conduct an on-site review of the
15		underwriting and claims processing operations of the
16		managing general agent.
17		(4) Binding authority for all reinsurance contracts or
18		participation in insurance or reinsurance syndicates shall
19		rest with an officer of the insurer, who shall not be
20		affiliated with the managing general agent.
21		(5) Within 30 days of entering into or terminating a
22		contract with a managing general agent, the insurer shall
23		provide written notification of the appointment or
24		termination to the Director. Notices of appointment of a
25		managing general agent shall include a statement of duties
26		that the applicant is expected to perform on behalf of the

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1		insurer, the lines of insurance for which the applicant is
2		to be authorized to act, and any other information the
3		Director may request.
4		(6) An insurer shall review its books and records each
5		quarter to determine if any producer has become a managing
6		general agent. If the insurer determines that a producer
7		has become a managing general agent, the insurer shall
8		promptly notify the producer and the Director of that
9		determination, and the insurer and producer must fully
10		comply with the provisions of this Section within 30 days
11		of the notification.
12		(7) The insurer shall file any managing general agent
13		contract for the Director's approval within 45 days after
14		the contract becomes subject to this Section. Failure of
15		the Director to disapprove the contract within 45 days
16		shall constitute approval thereof. Upon expiration of the
17		contract, the insurer shall submit the replacement
18		contract for approval. Contracts filed under this Section
19		shall be exempt from filing under Sections 141, 141.1 and
20		131.20a.
21		(8) An insurer shall not appoint to its board of
22		directors an officer, director, employee, or controlling
23		shareholder of its managing general agents. This provision
24		shall not apply to relationships governed by Article VIII
25		1/2 of this Code.
26		(e) The acts of a managing general agent are considered to

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1		be the acts of the insurer on whose behalf it is acting. A
2		managing general agent may be examined in the same manner as an
3		insurer.
4		(f) Retrospective compensation agreements for business
5		written under Section 4 of this Code in Illinois and outside of
6		Illinois by an insurer domiciled in this State must be filed
7		for approval. The standards for approval shall be as set forth
8		under Section 141 of this Code.
9		(g) Unless specifically required by the Director, the
10		provisions of this Section shall not apply to arrangements
11		between a managing general agent not underwriting any risks
12		located in Illinois and a foreign insurer domiciled in an NAIC
13		accredited state that has adopted legislation substantially
14		similar to the NAIC Managing General Agents Model Act. "NAIC
15		accredited state" means a state or territory of the United
16		States having an insurance regulatory agency that maintains an
17		accredited status granted by the National Association of
18		Insurance Commissioners.
19		(h) If the Director determines that a managing general
20		agent has not materially complied with this Section or any
21		regulation or order promulgated hereunder, after notice and
22		opportunity to be heard, the Director may order a penalty in an
23		amount not exceeding $100,000 for each separate violation and
24		may order the revocation or suspension of the producer's
25		license. If it is found that because of the material
26		noncompliance the insurer has suffered any loss or damage, the

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1		Director may maintain a civil action brought by or on behalf of
2		the insurer and its policyholders and creditors for recovery
3		of compensatory damages for the benefit of the insurer and its
4		policyholders and creditors or other appropriate relief. This
5		subsection (h) shall not be construed to prevent any other
6		person from taking civil action against a managing general
7		agent.
8		(i) If an Order of Rehabilitation or Liquidation is
9		entered under Article XIII and the receiver appointed under
10		that Order determines that the managing general agent or any
11		other person has not materially complied with this Section or
12		any regulation or Order promulgated hereunder and the insurer
13		suffered any loss or damage therefrom, the receiver may
14		maintain a civil action for recovery of damages or other
15		appropriate sanctions for the benefit of the insurer.
16		Any decision, determination, or order of the Director
17		under this subsection shall be subject to judicial review
18		under the Administrative Review Law.
19		Nothing contained in this subsection shall affect the
20		right of the Director to impose any other penalties provided
21		for in this Code.
22		Nothing contained in this subsection is intended to or
23		shall in any manner limit or restrict the rights of
24		policyholders, claimants, and auditors.
25		(j) A domestic company shall not during any calendar year
26		write, through a managing general agent or managing general

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1		agents, premiums in an amount equal to or greater than its
2		capital and surplus as of the preceding December 31st unless
3		the domestic company requests in writing the Director's
4		permission to do so and the Director has either approved the
5		request or has not disapproved the request within 45 days
6		after the Director received the request.
7		No domestic company with less than $5,000,000 of capital
8		and surplus may write any business through a managing general
9		agent unless the domestic company requests in writing the
10		Director's permission to do so and the Director has either
11		approved the request or has not disapproved the request within
12		45 days after the Director received the request.
13		(Source: P.A. 93-32, eff. 7-1-03.)
14		(215 ILCS 5/144) (from Ch. 73, par. 756)
15		Sec. 144. Limitation of risk.
16		(1) No company authorized to transact any of the kind of
17		business enumerated in Classes 2 and 3 of Section 4 in this
18		State may expose itself to any loss on any one risk or hazard
19		to an amount exceeding 10% of its admitted assets in excess of
20		its liabilities excluding, in the case of a stock company, its
21		capital stock liability. No portion of any such risk or hazard
22		which has been reinsured in a domestic or an approved foreign
23		or non-domestic alien company, in accordance with this Code,
24		shall be included in determining the limitation of risk
25		prescribed herein.

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1		(2) Any company transacting the kind of business
2		enumerated in clause (g) of Class 2 of Section 4 may expose
3		itself to a risk or hazard in excess of the amount prescribed
4		in subsection (1) if it is protected in excess of that amount
5		by the following:
6		(a) The co-suretyship of such a company similarly
7		authorized; or
8		(b) By deposit with it in pledge or conveyance to it in
9		trust for its protection of property; or
10		(c) By conveyance or mortgage for its protection; or
11		(d) In case a suretyship obligation was made on behalf
12		or on account of a fiduciary holding property in a trust
13		capacity, by deposit or other disposition of a portion of
14		the property so held in trust that no future sale,
15		mortgage, pledge or other disposition can be made thereof
16		without the consent of such company except by a judgment
17		or order of a court of competent jurisdiction.
18		(3) A company designated in subsection (2) may also
19		execute transportation or warehouse bonds for United States
20		Internal Revenue taxes to an amount equal to 50% of its capital
21		and surplus. When the penalty of the suretyship obligation
22		exceeds the amount of a judgment described therein as appealed
23		from and thereby secured, or exceeds the amount of the subject
24		matter in controversy or of the estate in the custody of the
25		fiduciary for the performance of whose duties it is
26		conditioned, the bond may be executed if the actual amount of

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1		the judgment or the subject matter in controversy or estate
2		not subject to supervision or control of the surety is not in
3		excess of such limitation. When the penalty of the suretyship
4		obligation executed for the performance of a contract exceeds
5		the contract price, the latter shall be taken as the basis for
6		estimating the limit of risk within the meaning of this
7		Section.
8		(4) Whenever the ratio of the annual premium volume in
9		proportion to the policyholder surplus of any company
10		transacting the kinds of business authorized in Class 2 and
11		Class 3 of Section 4 when reviewed in conjunction with the
12		kinds and nature of risks insured, the financial condition of
13		the company and its ownership including but not limited to the
14		liquidity of assets, relationship of surplus to liabilities
15		and adequacy of outstanding loss reserves, creates a condition
16		such that the further assumption of risks might be hazardous
17		to policyholders, creditors or the general public, then the
18		Director may order such company to take one or more of the
19		following steps:
20		(a) to reduce the loss exposure by reinsurance;
21		(b) to reduce the volume of new business being
22		accepted;
23		(c) to suspend the writing of new business for a
24		period not to exceed 3 months;
25		(d) to increase and maintain the company's surplus by
26		a contribution to surplus which will raise the surplus for

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1		such a period of time and by such an amount as the Director
2		may deem necessary and essential; or
3		(e) to reduce general or acquisition expenses by
4		specified methods.
5		(f) (Blank).
6		(5) The provisions of this Section do not apply to
7		domestic, foreign, and non-domestic alien Lloyds.
8		The company may, within 10 days after receipt of an Order
9		of the Director under this Section, request that the Director
10		hold a hearing to determine whether the Order of the Director
11		should be modified in any way. A request for a hearing by a
12		company under this Section stays any Order of the Director
13		entered under this Section until such time as the Director has
14		entered an Order pursuant to the hearing.
15		(Source: P.A. 89-97, eff. 7-7-95; 90-794, eff. 8-14-98.)
16		(215 ILCS 5/144.1) (from Ch. 73, par. 756.1)
17		Sec. 144.1. Insurance Sales by Insolvent or Impaired
18		Companies Prohibited.) (1) Unless allowed by the Director, no
19		foreign or non-domestic alien company officer, director,
20		trustee, agent, or employee of such company may renew, issue
21		or deliver or cause to be renewed, issued or delivered, any
22		policy, contract or certificate of insurance in this State,
23		nor may any domestic company, officer, director, trustee,
24		agent or employee of such company renew, issue or deliver or
25		cause to be renewed, issued or delivered, any policy, contract

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1		or certificate of insurance, for which a premium is charged or
2		collected, when the company writing such insurance is
3		insolvent or impaired and the fact of such insolvency or
4		impairment is known to the company officer, director, trustee,
5		agent or employee of such company. A company is impaired when
6		its assets are less than its capital, minimum required surplus
7		and all liabilities.
8		However, the existence of an impairment does not prevent
9		the issuance or renewal of a policy when an insured or owner
10		exercises an option granted to him under an existing policy to
11		obtain new, renewed or converted insurance coverage.
12		(2) Any company officer, director, trustee, agent, or
13		employee of such company violating this Section shall be
14		guilty of a Class A misdemeanor.
15		(Source: P.A. 82-498.)
16		(215 ILCS 5/146) (from Ch. 73, par. 758)
17		Sec. 146. Withdrawal of deposits.
18		(1) The Director shall at any time upon request release to
19		a company any portion of its deposit which is not required as a
20		compliance with the conditions of this Code.
21		(2) When all of the business of a company has been
22		reinsured in accordance with this Code and the assets thereof
23		by contract assigned to another company, the Director may
24		deliver to the reinsured company or to its assigns under the
25		contract of reinsurance after one year from the effective date

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1		of such reinsurance contract, all the securities deposited by
2		the reinsured company upon compliance with the following
3		conditions:
4		(a) The reinsuring company under the reinsurance contract
5		has assumed all liabilities of every kind due and to become due
6		which the deposit of the reinsured company was made to secure
7		or adequate provision has been made therefor;
8		(b) The said reinsuring company shall have and maintain a
9		deposit in this State or with the department or official
10		charged with the duty of supervising the business of insurance
11		in the state where it is incorporated or, if a non-domestic an
12		alien company, where it is entered, in securities authorized
13		by this Code as lawful investments of the company and in an
14		amount and value not less than the deposit formerly required
15		of the reinsured company by this Code; and
16		(c) The deposit of the said reinsuring company shall be
17		such that it will subsist for the security of all the
18		obligations of the reinsuring company.
19		(Source: Laws 1937, p. 696.)
20		(215 ILCS 5/148) (from Ch. 73, par. 760)
21		Sec. 148. Contents of advertisements as to financial
22		condition.
23		(1) No company authorized to do business in this State
24		shall cause to be inserted in any newspaper, periodical,
25		magazine or other publication, any advertisement purporting to

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1		set forth in figures its financial standing unless the figures
2		exhibited in such advertisement correspond to the figures
3		contained in the next preceding verified statement made to the
4		Director and unless there is set forth either
5		(a) the total amount of the capital actually paid in, the
6		total value of the admitted assets owned, the total amount of
7		the liabilities, including therein the reserves required by
8		law and the amount of the net surplus of assets over
9		liabilities actually available for the payment of losses and
10		claims and held for the protection of policyholders; or
11		(b) the capital paid in or the surplus, separately or
12		combined.
13		(2) No non-domestic alien company authorized to do
14		business in this State shall cause to be inserted in any
15		newspaper, periodical or magazine any advertisement purporting
16		to set forth in figures its financial standing, unless the
17		figures exhibited in such advertisement correspond to the
18		figures contained in the next preceding verified statement
19		made to the Director by the United States Branch of such
20		company and unless there is set forth the total amount of the
21		capital and assets held by its United States Branch, the total
22		amount of its liabilities, including therein the reserves
23		required by law and the total amount of the net surplus of
24		assets over all liabilities actually available for the payment
25		of losses and claims and held for the protection of its
26		policyholders in the United States; provided that any life

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1		company organized under the laws of the Dominion of Canada or
2		any province thereof may use in its advertising a statement of
3		its total business and condition in all countries if such
4		statement is accompanied by a statement showing the amount of
5		its total assets and total liabilities in the United States,
6		corresponding to the figures contained in the next preceding
7		statement of such company filed with the Director.
8		(3) Any company violating any provision of this section,
9		and any officer or director thereof knowingly participating in
10		or abetting such violation, shall be guilty of a business
11		offense and shall be required to pay a penalty of not less than
12		five hundred dollars nor more than one thousand dollars, to be
13		recovered in the name of the People of the State of Illinois by
14		the State's Attorney of the county in which the violation
15		occurs and the penalty so recovered shall be paid into the
16		county treasury.
17		(Source: P.A. 77-2699.)
18		(215 ILCS 5/154.5) (from Ch. 73, par. 766.5)
19		Sec. 154.5. Improper Claims Practices) It is an improper
20		claims practice for any domestic, foreign or non-domestic
21		alien company transacting business in this State to commit any
22		of the acts contained in Section 154.6 if:
23		(a) it is committed knowingly in violation of this Act or
24		any rules promulgated hereunder; or
25		(b) It has been committed with such frequency to indicate

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1		a persistent tendency to engage in that type of conduct.
2		(Source: P.A. 80-926.)
3		(215 ILCS 5/156) (from Ch. 73, par. 768)
4		Sec. 156. Merger and consolidation permitted.
5		(a) Upon complying with the provisions of this article,
6		any domestic company, except a Lloyds, is hereby authorized
7		and empowered to merge or consolidate with any domestic
8		company or with any foreign or non-domestic alien company,
9		except a Lloyds if the surviving company meets the
10		requirements for authorization to engage in the insurance
11		business in this state and, if such merger or consolidation is
12		authorized by the laws of the state or country under which such
13		foreign or non-domestic alien company is incorporated or
14		organized.
15		(b) The Director may permit the formation of a domestic
16		stock company that is established for the sole purpose of
17		merging or consolidating with an existing stock company
18		simultaneously with the effectiveness of a division authorized
19		by this Code. Upon request of the dividing company, the
20		Director may waive the requirements of Section 131.8 of this
21		Code. Each domestic stock company formed under this subsection
22		shall be deemed to exist before a merger and division under
23		this Section becomes effective, but solely for the purpose of
24		being a party to such merger and division. The Director shall
25		not require that such domestic stock company be licensed to

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1		transact insurance business in this state before such merger
2		and division. All insurance policies, annuities, or
3		reinsurance agreements allocated to such domestic stock
4		company shall become the obligation of the domestic stock
5		company that survives the merger simultaneously with the
6		effectiveness of the merger and division. The plan of merger
7		or consolidation shall be deemed to have been authorized and
8		approved by such domestic stock company if the dividing
9		company authorized and approved such plan. The certificate of
10		merger shall state that it was approved by the domestic stock
11		company formed under this subsection.
12		(Source: P.A. 100-1118, eff. 11-27-18.)
13		(215 ILCS 5/156.1) (from Ch. 73, par. 768.1)
14		Sec. 156.1. Acquisition by exchange of stock permitted.
15		Any domestic stock insurance company may adopt a plan of
16		exchange of the outstanding stock of its stockholders for the
17		consideration herein designated to be paid or provided by a
18		corporation which acquires such stock, in the manner provided
19		in this Article.
20		The plan of exchange may provide that the acquiring
21		corporation, as consideration for the stock of the domestic
22		corporation, (1) transfer shares of its stock, or (2) transfer
23		other securities issued by it, or (3) pay cash therefor, or (4)
24		pay or provide other consideration, or (5) pay or provide any
25		combination of the foregoing types of consideration.

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1		"Acquiring corporation", as used in this Article, means
2		any stock insurance corporation incorporated under this Code
3		or under prior laws of this State relating to the
4		incorporation of domestic insurance corporations; any stock
5		corporation incorporated under the "Business Corporation Act
6		of 1983" or under prior laws of this State authorizing the
7		establishment of business corporations; and any foreign or
8		non-domestic alien stock corporation qualified to do business
9		in Illinois and registered by the corporation department; and
10		any foreign or non-domestic alien stock insurance company
11		authorized to do business in Illinois.
12		(Source: P.A. 83-1362.)
13		(215 ILCS 5/157) (from Ch. 73, par. 769)
14		Sec. 157. Powers of company not enlarged.
15		Nothing in this article contained shall be construed to
16		authorize any company to engage in any kind of insurance
17		business not authorized by its articles of incorporation nor
18		to authorize any foreign or non-domestic alien company to
19		engage in any kind of insurance business in this State not
20		covered by its certificate of authority to do business in this
21		State.
22		(Source: Laws 1937, p. 696.)
23		(215 ILCS 5/161) (from Ch. 73, par. 773)
24		Sec. 161. Approval and execution of agreement or plan of

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1		exchange by foreign or non-domestic alien company.
2		In the event that a foreign or non-domestic alien company
3		is a party to the agreement of merger or consolidation or plan
4		of exchange, the agreement or plan shall be executed by the
5		proper officers of such foreign or non-domestic alien company
6		when they are duly authorized thereto by such action on the
7		part of the directors, shareholders, members, or policyholders
8		of such foreign or non-domestic alien company as may be
9		required by the laws of the domiciliary state or country of
10		such foreign or non-domestic alien company.
11		(Source: Laws 1967, p. 2406.)
12		(215 ILCS 5/162) (from Ch. 73, par. 774)
13		Sec. 162. Certificate of Merger or Consolidation or Plan
14		of Exchange and Certificate of Approval.
15		(1) Upon the execution of an agreement of merger or
16		consolidation or plan of exchange, there shall be delivered to
17		the Director:
18		(a) two duplicate originals of the agreement or plan;
19		(b) affidavits of officers of each of the companies
20		setting forth the facts necessary to show that all
21		requirements of law with respect to notices to persons
22		entitled to vote have been complied with;
23		(c) certificates of the secretaries or assistant
24		secretaries or corresponding officers of each of the
25		companies, in case of a merger or consolidation, or of the

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1		company to be acquired in case of a plan of exchange,
2		certifying to the number of shares, if any, outstanding,
3		the number of shares voted for and against such agreement
4		or plan, and further in the case of a merger or
5		consolidation (1) the number of policyholders represented
6		at the meeting at which the agreement was considered, and
7		(2) the number of votes cast by policyholders for and
8		against such agreement or (3) in the case of a fraternal
9		benefit society, the number of delegates of the supreme
10		legislative or governing body, and the number of votes
11		cast by the delegates for and against the agreement;
12		(d) the certificates required by Section 171;
13		(e) if the surviving or new company is a domestic
14		company and any foreign or non-domestic alien company is a
15		party to the merger or consolidation and the laws of the
16		state or country under which such foreign or non-domestic
17		alien company is incorporated require approval of the
18		merger or consolidation by an official of such state or
19		country, a certificate of approval of such official; and
20		(f) in case of consolidation where the new company is
21		a foreign or non-domestic alien company, an instrument
22		appointing the Director and his or her successor or
23		successors in office, the attorney of such company for
24		service of process, containing the same provisions and
25		having the same effect as the instrument required of a
26		foreign or non-domestic alien company in order to be

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1		admitted to transact business in this State.
2		In addition, the Director shall be provided, in
3		substantially the same form, the information required under
4		Article VIII 1/2 of this Code.
5		(2) In case the surviving or new company is a domestic
6		company, if the Director finds that:
7		(a) the agreement of merger or consolidation is in
8		accordance with the provisions of this Article and not
9		inconsistent with the laws and the Constitutions of this
10		State and the United States;
11		(b) the surviving or new company has complied with all
12		applicable provisions of this Code;
13		(c) no reasonable objection exists to such merger or
14		consolidation; and
15		(d) the standards established under Article VIII 1/2
16		are satisfied;
17		he or she shall approve the agreement. The provisions of any
18		law with reference to age limits and medical examination shall
19		be inoperative in so far as agreements of merger or
20		consolidation are concerned. If the agreement of merger or
21		consolidation be approved by the Director, he or she shall
22		file the affidavits and certificates and one of the duplicate
23		originals of the agreement in his or her office, endorse upon
24		the other duplicate original his or her approval thereof, and
25		deliver it, together with a certificate of merger or
26		consolidation, as the case may be, to the surviving or new

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1		company. In the case of a consolidation, the Director shall
2		also issue a certificate of authority to the new company.
3		(3) In case the surviving or new company is a foreign or
4		non-domestic alien company, if the Director finds that:
5		(a) the agreement of merger or consolidation is in
6		accordance with the provisions of this Article and not
7		inconsistent with the laws and the Constitutions of this
8		State and the United States;
9		(b) the agreement of merger or consolidation provides
10		for the assumption by the new or surviving company of all
11		the liabilities and obligations of the companies parties
12		to the merger or consolidation and otherwise affords
13		proper protection for creditors and policyholders and that
14		such provisions are not inconsistent with the laws of the
15		state or country of incorporation of such new or surviving
16		company;
17		(c) the surviving or new company has complied with all
18		applicable provisions of this Code;
19		(d) no reasonable objection exists to such merger or
20		consolidation; and
21		(e) the standards established under Article VIII 1/2
22		are satisfied;
23		he or she shall approve the agreement. If the agreement be
24		approved by the Director, he or she shall file the affidavits
25		and certificates and one of the duplicate originals of the
26		agreement in his or her office, endorse upon the other

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1		duplicate original his or her approval thereof, and deliver
2		it, together with a certificate of approval of the merger or
3		consolidation, as the case may be, to the surviving or new
4		company.
5		(4) In the case of a plan of exchange, if the Director
6		finds that the parties to the exchange have established that:
7		(a) the plan, if effective, will not tend adversely to
8		affect the financial stability or management of any
9		domestic company which is a party thereto or the general
10		capacity or intention to continue the safe and prudent
11		transaction of the insurance business of such domestic
12		company or companies;
13		(b) the interests of the policyholders and
14		shareholders of each domestic insurance company which is a
15		party to the plan are protected;
16		(c) the competence, experience and integrity of those
17		persons who would control the operation of the domestic
18		company are such as to be in the best interests of the
19		policyholders of such company to permit such exchange;
20		(d) the terms and conditions of the plan are fair and
21		reasonable; and
22		(e) the standards established under Article VIII 1/2
23		are satisfied;
24		he or she shall approve the plan of exchange. If the plan of
25		exchange be approved by the Director, he or she shall file the
26		affidavits and certificates and one of the duplicate originals

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1		of the plan of exchange in his or her office, endorse upon the
2		other duplicate original his or her approval thereof, and
3		deliver it, together with a certificate of approval of the
4		plan of exchange to the domestic company.
5		(5) If the Director refuses to approve the agreement of
6		merger or consolidation, or plan of exchange, notice of such
7		refusal, assigning the reasons therefor, shall be given in
8		writing by the Director to each of the companies party
9		thereto, within 60 days from the date of the delivery of such
10		agreements or plan to him or her, and he or she shall grant any
11		of such companies a hearing upon request. The hearing shall be
12		held within 30 days of the Director's receipt of request for
13		hearing. All persons to whom it is proposed to issue
14		securities in such agreements or exchange shall have a right
15		to appear. Within 30 days after the close of the hearing the
16		Director shall approve or disapprove or place conditions
17		precedent upon his or her approval of the merger or
18		consolidation or plan by issuing a written order stating his
19		or her determination and the reasons therefor.
20		(Source: P.A. 90-381, eff. 8-14-97.)
21		(215 ILCS 5/163) (from Ch. 73, par. 775)
22		Sec. 163. Date merger or consolidation or plan of exchange
23		effected.
24		(1) If the surviving or new company is a domestic company,
25		the merger or consolidation is effected upon the issuance of

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1		the certificate of merger or the certificate of consolidation,
2		as the case may be.
3		(2) If the surviving or new company is a foreign or
4		non-domestic alien company and the Director has issued a
5		certificate of approval of the merger or consolidation, the
6		date upon which the merger or consolidation is effected shall
7		be determined by the laws of the state or country of
8		incorporation or organization of the surviving or new company.
9		However, the merger or consolidation shall in no event become
10		effective in this State until a certificate of merger or
11		consolidation, as the case may be, or other evidence that the
12		merger or consolidation is effected is issued by the proper
13		official of the state or country of incorporation or
14		organization of the surviving or new company and is filed with
15		and approved by the Director.
16		(3) Notice of adoption of the plan and the approval
17		thereof by the Director shall be delivered or mailed to each
18		shareholder of record of the domestic insurance company to be
19		acquired who was entitled to vote thereon and an affidavit of
20		the secretary or assistant secretary of such company or of an
21		officer of the company's transfer agent that such notice was
22		given shall be filed with the Director. The plan shall become
23		effective 10 days after receipt of the affidavit by the
24		Director. A plan of exchange may be abandoned pursuant to any
25		provisions for abandonment contained therein at any time,
26		provided that notice of such abandonment shall be delivered or

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1		mailed to each such stockholder and filed with the Director
2		prior to the termination of such 10 day period.
3		(Source: Laws 1967, p. 2406.)
4		(215 ILCS 5/164) (from Ch. 73, par. 776)
5		Sec. 164. Removal of property of domestic, merged or
6		consolidated company from this State.
7		(1) If the surviving or new company shall be a foreign or
8		non-domestic alien company, no property of the domestic merged
9		or consolidated company shall be removed from this State by
10		reason of such merger or consolidation, prior to, nor shall
11		title to such property vest in the surviving or new company
12		until, the merger or consolidation shall become effective in
13		this State as provided in section 163.
14		(2) Any director or officer of any domestic company
15		removing or permitting the removal of any property of company
16		from this State in violation of this section, shall be guilty
17		of a Class A misdemeanor.
18		(Source: P.A. 77-2699.)
19		(215 ILCS 5/166) (from Ch. 73, par. 778)
20		Sec. 166. Effect of merger or consolidation.
21		(1) If the surviving or new company is a domestic company,
22		when such merger or consolidation has been effected
23		(a) the several companies parties to the agreement of
24		merger or consolidation shall be a single company, which, in

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1		the case of a merger, shall be that company designated in the
2		agreement of merger as the surviving company, and in the case
3		of a consolidation, shall be the new company provided for in
4		the agreement of consolidation;
5		(b) the separate existence of all of the companies parties
6		to the agreement of merger or consolidation, except the
7		surviving company in the case of a merger, shall cease;
8		(c) such surviving or new company shall have all of the
9		rights, privileges, immunities and powers and shall be subject
10		to all of the duties and liabilities granted or imposed by this
11		Code;
12		(d) such surviving or new company shall thereupon and
13		thereafter possess all the rights, privileges, immunities,
14		powers and franchises of a public as well as of a private
15		nature, of each of the companies so merged or consolidated;
16		and all property, real, personal and mixed, and all debts due
17		on whatever account, including subscriptions to shares,
18		assessments payable from members or policyholders, and all
19		other choses in action and all and every other interest of, or
20		belonging to or due to, each of the companies so merged or
21		consolidated shall be deemed to be transferred to and vested
22		in such surviving or new company without further act or deed;
23		and the title to any real estate, or any interest therein,
24		under the laws of this State vested in any of such companies
25		shall not revert or be in any way impaired by reason of such
26		merger or consolidation;

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1		(e) such surviving or new company shall thenceforth be
2		responsible and liable for all the liabilities and obligations
3		of each of the companies so merged or consolidated; any claim
4		existing or action or proceeding pending by or against any of
5		such companies may be prosecuted to judgment as if such merger
6		or consolidation had not taken place, or such surviving or new
7		company may be substituted in its place; neither the rights of
8		creditors nor any liens upon the property of any of such
9		companies shall be impaired by such merger or consolidation,
10		but such liens shall be limited to the property upon which they
11		were liens immediately prior to the time of such merger or
12		consolidation, unless otherwise provided in the agreement of
13		merger or consolidation; and
14		(f) in case of a merger, the articles of incorporation of
15		the surviving company shall be supplanted and superseded to
16		the extent, if any, that any provision or provisions of such
17		articles shall be restated in the agreement of merger as
18		provided in section 158, and such articles of incorporation,
19		shall be deemed to be thereby and to that extent amended; in
20		case of a consolidation, the statements set forth in the
21		agreement of consolidation as provided in section 158 shall be
22		deemed to be articles of incorporation of the new company
23		formed by such consolidation.
24		(2) If the surviving or new company is a foreign or
25		non-domestic alien company, when such merger or consolidation
26		has become effective in this State

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1		(a) the effect of the merger or consolidation shall be
2		determined by the law of the state of incorporation or
3		organization of such company;
4		(b) the separate existence of all domestic companies
5		parties to the plan of merger or consolidation shall cease;
6		(c) all property, real, personal, and mixed, and all debts
7		due on whatever account including subscriptions to shares,
8		assessments payable from members or policyholders and all
9		other choses in action and all and every other interest of or
10		belonging to and due to each of the companies so merged or
11		consolidated shall be taken and deemed to be transferred to
12		and vested in such surviving or new company without further
13		act or deed, and the title to any real estate, or any interest
14		therein, shall not revert or be in any way impaired by reason
15		of such merger or consolidation.
16		(3) In the event of a merger or consolidation under this
17		article, the surviving company or the consolidated company
18		shall be considered as having the age of the oldest company
19		which is a party to such merger or consolidation for the
20		purpose of complying with requirements of the laws relating to
21		age of company.
22		(Source: Laws 1937, p. 696.)
23		(215 ILCS 5/169) (from Ch. 73, par. 781)
24		Sec. 169. Rights of dissenting shareholders and
25		policyholders of foreign or non-domestic alien company.

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1		The rights of any dissenting shareholder, member or
2		policyholder of any foreign or non-domestic alien company
3		party to a merger or consolidation, shall be those afforded to
4		such shareholder, member, or policyholder by the laws of the
5		domiciliary state or country of such foreign or non-domestic
6		alien company.
7		(Source: Laws 1937, p. 696.)
8		(215 ILCS 5/170) (from Ch. 73, par. 782)
9		Sec. 170. Transfer of deposits.
10		(1) If the surviving or new company shall be a foreign or
11		non-domestic alien company and the laws of the state or
12		country under which such surviving or new company is
13		incorporated or organized shall require the maintenance with
14		any official of such State or country of a deposit of the legal
15		reserve on any policies, then the Director is authorized to
16		deliver to the proper custodian of such deposits of such state
17		or country any deposits theretofore made with the Director
18		pertaining to policies of any of the merged or consolidated
19		companies. If the surviving or new company shall be a domestic
20		company into which has been merged or consolidated a foreign
21		or non-domestic alien company incorporated or organized in a
22		state or country the laws of which require the maintenance
23		with an official of a deposit of the legal reserve on any
24		policies, then the Director is hereby authorized to receive
25		from such official any deposit theretofore made with such

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1		official pertaining to the policies of any of the merged or
2		consolidated companies.
3		(2) Any surviving or new company shall, within 60 days
4		after the transfer of such deposit, notify the holder of every
5		policy secured by such transferred deposit, that the transfer
6		has been made. The president or vice-president and secretary
7		or assistant secretary of such company, or the executive
8		officers corresponding thereto, shall within 30 days
9		thereafter, file with the Director an affidavit of the fact
10		that due notice to policyholders, as provided for herein, has
11		been given. If a surviving or new company shall be a foreign or
12		non-domestic alien company, the Director shall require from
13		such company, before transferring any deposit to any official
14		of the state or country under the laws of which such foreign or
15		non-domestic alien company is incorporated or organized, a
16		written agreement that notice of such transfer will be given
17		to policyholders and that an affidavit with regard to such
18		notice will be furnished to the Director as in this section
19		provided.
20		(3) In the event any deposit is to be maintained in this
21		State by reason of this section, the amount thereof from time
22		to time for each such policy shall be at least equal to the
23		amount which would be required in the state where such deposit
24		was theretofore maintained under the provisions of the law of
25		such state in effect on the date the merger or consolidation
26		was effected. The deposits so maintained in this State shall

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1		consist of securities of the kinds authorized for investment
2		by Article VIII of this Code.
3		(Source: Laws 1959, p. 1431.)
4		(215 ILCS 5/173.1) (from Ch. 73, par. 785.1)
5		(Text of Section before amendment by P.A. 102-578)
6		Sec. 173.1. Credit allowed a domestic ceding insurer.
7		(1) Except as otherwise provided under Article VIII 1/2 of
8		this Code and related provisions of the Illinois
9		Administrative Code, credit for reinsurance shall be allowed a
10		domestic ceding insurer as either an admitted asset or a
11		deduction from liability on account of reinsurance ceded only
12		when the reinsurer meets the requirements of paragraph (A) or
13		(B) or (B-5) or (C) or (C-5) or (D) of this subsection (1).
14		Credit shall be allowed under paragraph (A), (B), or (B-5) of
15		this subsection (1) only as respects cessions of those kinds
16		or classes of business in which the assuming insurer is
17		licensed or otherwise permitted to write or assume in its
18		state of domicile, or in the case of a U.S. branch of a
19		non-domestic an alien assuming insurer, in the state through
20		which it is entered and licensed to transact insurance or
21		reinsurance. Credit shall be allowed under paragraph (B-5) or
22		(C) of this subsection (1) only if the applicable requirements
23		of paragraph (E) of this subsection (1) have been satisfied.
24		(A) Credit shall be allowed when the reinsurance is
25		ceded to an assuming insurer that is authorized in this

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1		State to transact the types of insurance ceded and has at
2		least $5,000,000 in capital and surplus.
3		(B) Credit shall be allowed when the reinsurance is
4		ceded to an assuming insurer that is accredited as a
5		reinsurer in this State. An accredited reinsurer is one
6		that:
7		(1) files with the Director evidence of its
8		submission to this State's jurisdiction;
9		(2) submits to this State's authority to examine
10		its books and records;
11		(3) is licensed to transact insurance or
12		reinsurance in at least one state, or in the case of a
13		U.S. branch of a non-domestic an alien assuming
14		insurer is entered through and licensed to transact
15		insurance or reinsurance in at least one state;
16		(4) files annually with the Director a copy of its
17		annual statement filed with the insurance department
18		of its state of domicile and a copy of its most recent
19		audited financial statement; and
20		(5) maintains a surplus as regards policyholders
21		in an amount that is not less than $20,000,000 and
22		whose accreditation has been approved by the Director.
23		(B-5)(1) Credit shall be allowed when the reinsurance
24		is ceded to an assuming insurer that is domiciled in, or in
25		the case of a U.S. branch of a non-domestic an alien
26		assuming insurer is entered through, a state that employs

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1		standards regarding credit for reinsurance substantially
2		similar to those applicable under this Code and the
3		assuming insurer or U.S. branch of a non-domestic an alien
4		assuming insurer:
5		(a) maintains a surplus as regards policyholders
6		in an amount not less than $20,000,000; and
7		(b) submits to the authority of this State to
8		examine its books and records.
9		(2) The requirement of item (a) of subparagraph (1) of
10		paragraph (B-5) of this subsection (1) does not apply to
11		reinsurance ceded and assumed pursuant to pooling
12		arrangements among insurers in the same holding company
13		system.
14		(C)(1) Credit shall be allowed when the reinsurance
15		is ceded to an assuming insurer that maintains a trust
16		fund in a qualified United States financial institution,
17		as defined in paragraph (B) of subsection (3) of this
18		Section, for the payment of the valid claims of its United
19		States policyholders and ceding insurers, their assigns
20		and successors in interest. The assuming insurer shall
21		report to the Director information substantially the same
22		as that required to be reported on the NAIC annual and
23		quarterly financial statement by authorized insurers and
24		any other financial information that the Director deems
25		necessary to determine the financial condition of the
26		assuming insurer and the sufficiency of the trust fund.

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1		The assuming insurer shall provide or make the information
2		available to the ceding insurer. The assuming insurer may
3		decline to release trade secrets or commercially sensitive
4		information that would qualify as exempt from disclosure
5		under the Freedom of Information Act. The Director shall
6		also make the information publicly available, subject only
7		to such reasonable objections as might be raised to a
8		request pursuant to the Freedom of Information Act, as
9		determined by the Director. The assuming insurer shall
10		submit to examination of its books and records by the
11		Director and bear the expense of examination.
12		(2)(a) Credit for reinsurance shall not be granted
13		under this subsection unless the form of the trust and any
14		amendments to the trust have been approved by:
15		(i) the regulatory official of the state where the
16		trust is domiciled; or
17		(ii) the regulatory official of another state who,
18		pursuant to the terms of the trust instrument, has
19		accepted principal regulatory oversight of the trust.
20		(b) The form of the trust and any trust amendments
21		also shall be filed with the regulatory official of every
22		state in which the ceding insurer beneficiaries of the
23		trust are domiciled. The trust instrument shall provide
24		that contested claims shall be valid and enforceable upon
25		the final order of any court of competent jurisdiction in
26		the United States. The trust shall vest legal title to its

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1		assets in its trustees for the benefit of the assuming
2		insurer's United States policyholders and ceding insurees
3		and their assigns and successors in interest. The trust
4		and the assuming insurer shall be subject to examination
5		as determined by the Director.
6		(c) The trust shall remain in effect for as long as the
7		assuming insurer has outstanding obligations due under the
8		reinsurance agreements subject to the trust. No later than
9		February 28 of each year the trustee of the trust shall
10		report to the Director in writing the balance of the trust
11		and a list of the trust's investments at the preceding
12		year-end and shall certify the date of termination of the
13		trust, if so planned, or certify that the trust will not
14		expire prior to the next following December 31.
15		No later than February 28 of each year, the assuming
16		insurer's chief executive officer or chief financial
17		officer shall certify to the Director that the trust fund
18		contains funds in an amount not less than the assuming
19		insurer's liabilities (as reported to the assuming insurer
20		by its cedent) attributable to reinsurance ceded by U.S.
21		ceding insurers, and in addition, a trusteed surplus of no
22		less than $20,000,000. In the event that item (a-5) of
23		subparagraph (3) of this paragraph (C) applies to the
24		trust, the assuming insurer's chief executive officer or
25		chief financial officer shall then certify to the Director
26		that the trust fund contains funds in an amount not less

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1		than the assuming insurer's liabilities (as reported to
2		the assuming insurer by its cedent) attributable to
3		reinsurance ceded by U.S. ceding insurers and, in
4		addition, a reduced trusteed surplus of not less than the
5		amount that has been authorized by the regulatory
6		authority having principal regulatory oversight of the
7		trust.
8		(d) No later than February 28 of each year, an
9		assuming insurer that maintains a trust fund in accordance
10		with this paragraph (C) shall provide or make available,
11		if requested by a beneficiary under the trust fund, the
12		following information to the assuming insurer's U.S.
13		ceding insurers or their assigns and successors in
14		interest:
15		(i) a copy of the form of the trust agreement and
16		any trust amendments to the trust agreement pertaining
17		to the trust fund;
18		(ii) a copy of the annual and quarterly financial
19		information, and its most recent audited financial
20		statement provided to the Director by the assuming
21		insurer, including any exhibits and schedules thereto;
22		(iii) any financial information provided to the
23		Director by the assuming insurer that the Director has
24		deemed necessary to determine the financial condition
25		of the assuming insurer and the sufficiency of the
26		trust fund;

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1		(iv) a copy of any annual and quarterly financial
2		information provided to the Director by the trustee of
3		the trust fund maintained by the assuming insurer,
4		including any exhibits and schedules thereto;
5		(v) a copy of the information required to be
6		reported by the trustee of the trust to the Director
7		under the provisions of this paragraph (C); and
8		(vi) a written certification that the trust fund
9		consists of funds in trust in an amount not less than
10		the assuming insurer's liabilities attributable to
11		reinsurance liabilities (as reported to the assuming
12		insurer by its cedent) attributable to reinsurance
13		ceded by U.S. ceding insurers and, in addition, a
14		trusteed surplus of not less than $20,000,000.
15		(3) The following requirements apply to the following
16		categories of assuming insurer:
17		(a) The trust fund for a single assuming insurer
18		shall consist of funds in trust in an amount not less
19		than the assuming insurer's liabilities attributable
20		to reinsurance ceded by U.S. ceding insurers, and in
21		addition, the assuming insurer shall maintain a
22		trusteed surplus of not less than $20,000,000, except
23		as provided in item (a-5) of this subparagraph (3).
24		(a-5) At any time after the assuming insurer has
25		permanently discontinued underwriting new business
26		secured by the trust for at least 3 full years, the

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1		Director with principal regulatory oversight of the
2		trust may authorize a reduction in the required
3		trusteed surplus, but only after a finding, based on
4		an assessment of the risk, that the new required
5		surplus level is adequate for the protection of U.S.
6		ceding insurers, policyholders, and claimants in light
7		of reasonably foreseeable adverse loss development.
8		The risk assessment may involve an actuarial review,
9		including an independent analysis of reserves and cash
10		flows, and shall consider all material risk factors,
11		including, when applicable, the lines of business
12		involved, the stability of the incurred loss
13		estimates, and the effect of the surplus requirements
14		on the assuming insurer's liquidity or solvency. The
15		minimum required trusteed surplus may not be reduced
16		to an amount less than 30% of the assuming insurer's
17		liabilities attributable to reinsurance ceded by U.S.
18		ceding insurers covered by the trust.
19		(b)(i) In the case of a group including
20		incorporated and individual unincorporated
21		underwriters:
22		(I) for reinsurance ceded under reinsurance
23		agreements with an inception, amendment, or
24		renewal date on or after January 1, 1993, the
25		trust shall consist of a trusteed account in an
26		amount not less than the respective underwriters'

SB3865 Engrossed - 288 - LRB102 24242 RJF 33473 b
1		several liabilities attributable to business ceded
2		by U.S. domiciled ceding insurers to any member of
3		the group;
4		(II) for reinsurance ceded under reinsurance
5		agreements with an inception date on or before
6		December 31, 1992 and not amended or renewed after
7		that date, notwithstanding the other provisions of
8		this Act, the trust shall consist of a trusteed
9		account in an amount not less than the group's
10		several insurance and reinsurance liabilities
11		attributable to business written in the United
12		States; and
13		(III) in addition to these trusts, the group
14		shall maintain in trust a trusteed surplus of
15		which not less than $100,000,000 shall be held
16		jointly for the benefit of the U.S. domiciled
17		ceding insurers of any member of the group for all
18		years of account.
19		(ii) The incorporated members of the group shall
20		not be engaged in any business other than underwriting
21		as a member of the group and shall be subject to the
22		same level of solvency regulation and control by the
23		group's domiciliary regulator as are the
24		unincorporated members.
25		(iii) Within 90 days after its financial
26		statements are due to be filed with the group's

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1		domiciliary regulator, the group shall provide to the
2		Director an annual certification by the group's
3		domiciliary regulator of the solvency of each
4		underwriter member, or if a certification is
5		unavailable, financial statements prepared by
6		independent public accountants of each underwriter
7		member of the group.
8		(c) In the case of a group of incorporated
9		insurers under common administration, the group shall:
10		(i) have continuously transacted an insurance
11		business outside the United States for at least 3
12		years immediately before making application for
13		accreditation;
14		(ii) maintain aggregate policyholders' surplus
15		of not less than $10,000,000,000;
16		(iii) maintain a trust in an amount not less
17		than the group's several liabilities attributable
18		to business ceded by United States domiciled
19		ceding insurers to any member of the group
20		pursuant to reinsurance contracts issued in the
21		name of the group;
22		(iv) in addition, maintain a joint trusteed
23		surplus of which not less than $100,000,000 shall
24		be held jointly for the benefit of the United
25		States ceding insurers of any member of the group
26		as additional security for these liabilities; and

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1		(v) within 90 days after its financial
2		statements are due to be filed with the group's
3		domiciliary regulator, make available to the
4		Director an annual certification of each
5		underwriter member's solvency by the member's
6		domiciliary regulator and financial statements of
7		each underwriter member of the group prepared by
8		its independent public accountant.
9		(C-5) Credit shall be allowed when the reinsurance is
10		ceded to an assuming insurer that has been certified by
11		the Director as a reinsurer in this State and secures its
12		obligations in accordance with the requirements of this
13		paragraph (C-5).
14		(1) In order to be eligible for certification, the
15		assuming insurer shall meet the following
16		requirements:
17		(a) the assuming insurer must be domiciled and
18		licensed to transact insurance or reinsurance in a
19		qualified jurisdiction, as determined by the
20		Director pursuant to subparagraph (3) of this
21		paragraph (C-5);
22		(b) the assuming insurer must maintain minimum
23		capital and surplus, or its equivalent, in an
24		amount not less than $250,000,000 or such greater
25		amount as determined by the Director pursuant to
26		regulation; this requirement may also be satisfied

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1		by an association, including incorporated and
2		individual unincorporated underwriters, having
3		minimum capital and surplus equivalents (net of
4		liabilities) of at least $250,000,000 and a
5		central fund containing a balance of at least
6		$250,000,000;
7		(c) the assuming insurer must maintain
8		financial strength ratings from 2 or more rating
9		agencies deemed acceptable by the Director; these
10		ratings shall be based on interactive
11		communication between the rating agency and the
12		assuming insurer and shall not be based solely on
13		publicly available information; each certified
14		reinsurer shall be rated on a legal entity basis,
15		with due consideration being given to the group
16		rating where appropriate, except that an
17		association, including incorporated and individual
18		unincorporated underwriters, that has been
19		approved to do business as a single certified
20		reinsurer may be evaluated on the basis of its
21		group rating; these financial strength ratings
22		shall be one factor used by the Director in
23		determining the rating that is assigned to the
24		assuming insurer; acceptable rating agencies
25		include the following:
26		(i) Standard & Poor's;

SB3865 Engrossed - 292 - LRB102 24242 RJF 33473 b
1		(ii) Moody's Investors Service;
2		(iii) Fitch Ratings;
3		(iv) A.M. Best Company; or
4		(v) any other nationally recognized
5		statistical rating organization;
6		(d) the assuming insurer must agree to submit
7		to the jurisdiction of this State, appoint the
8		Director as its agent for service of process in
9		this State, and agree to provide security for 100%
10		of the assuming insurer's liabilities attributable
11		to reinsurance ceded by U.S. ceding insurers if it
12		resists enforcement of a final U.S. judgment; and
13		(e) the assuming insurer must agree to meet
14		applicable information filing requirements as
15		determined by the Director, both with respect to
16		an initial application for certification and on an
17		ongoing basis.
18		(2) An association, including incorporated and
19		individual unincorporated underwriters, may be a
20		certified reinsurer. In order to be eligible for
21		certification, in addition to satisfying the
22		requirements of subparagraph (1) of this paragraph
23		(C-5):
24		(a) the association shall satisfy its minimum
25		capital and surplus requirements through the
26		capital and surplus equivalents (net of

SB3865 Engrossed - 293 - LRB102 24242 RJF 33473 b
1		liabilities) of the association and its members,
2		which shall include a joint central fund that may
3		be applied to any unsatisfied obligation of the
4		association or any of its members, in the amounts
5		specified in item (b) of subparagraph (1) of this
6		paragraph (C-5);
7		(b) the incorporated members of the
8		association shall not be engaged in any business
9		other than underwriting as a member of the
10		association and shall be subject to the same level
11		of regulation and solvency control by the
12		association's domiciliary regulator as are the
13		unincorporated members; and
14		(c) within 90 days after its financial
15		statements are due to be filed with the
16		association's domiciliary regulator, the
17		association shall provide to the Director an
18		annual certification by the association's
19		domiciliary regulator of the solvency of each
20		underwriter member; or if a certification is
21		unavailable, financial statements, prepared by
22		independent public accountants, of each
23		underwriter member of the association.
24		(3) The Director shall create and publish a list
25		of qualified jurisdictions, under which an assuming
26		insurer licensed and domiciled in such jurisdiction is

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1		eligible to be considered for certification by the
2		Director as a certified reinsurer.
3		(a) In order to determine whether the
4		domiciliary jurisdiction of a non-U.S. assuming
5		insurer is eligible to be recognized as a
6		qualified jurisdiction, the Director shall
7		evaluate the appropriateness and effectiveness of
8		the reinsurance supervisory system of the
9		jurisdiction, both initially and on an ongoing
10		basis, and consider the rights, benefits, and
11		extent of reciprocal recognition afforded by the
12		non-U.S. jurisdiction to reinsurers licensed and
13		domiciled in the U.S. A qualified jurisdiction
14		must agree in writing to share information and
15		cooperate with the Director with respect to all
16		certified reinsurers domiciled within that
17		jurisdiction. A jurisdiction may not be recognized
18		as a qualified jurisdiction if the Director has
19		determined that the jurisdiction does not
20		adequately and promptly enforce final U.S.
21		judgments and arbitration awards. The costs and
22		expenses associated with the Director's review and
23		evaluation of the domiciliary jurisdictions of
24		non-U.S. assuming insurers shall be borne by the
25		certified reinsurer or reinsurers domiciled in
26		such jurisdiction.

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1		(b) Additional factors to be considered in
2		determining whether to recognize a qualified
3		jurisdiction include, but are not limited to, the
4		following:
5		(i) the framework under which the assuming
6		insurer is regulated;
7		(ii) the structure and authority of the
8		domiciliary regulator with regard to solvency
9		regulation requirements and financial
10		surveillance;
11		(iii) the substance of financial and
12		operating standards for assuming insurers in
13		the domiciliary jurisdiction;
14		(iv) the form and substance of financial
15		reports required to be filed or made publicly
16		available by reinsurers in the domiciliary
17		jurisdiction and the accounting principles
18		used;
19		(v) the domiciliary regulator's
20		willingness to cooperate with U.S. regulators
21		in general and the Director in particular;
22		(vi) the history of performance by
23		assuming insurers in the domiciliary
24		jurisdiction;
25		(vii) any documented evidence of
26		substantial problems with the enforcement of

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1		final U.S. judgments in the domiciliary
2		jurisdiction; and
3		(viii) any relevant international
4		standards or guidance with respect to mutual
5		recognition of reinsurance supervision adopted
6		by the International Association of Insurance
7		Supervisors or its successor organization.
8		(c) If, upon conducting an evaluation under
9		this paragraph with respect to the reinsurance
10		supervisory system of any non-U.S. assuming
11		insurer, the Director determines that the
12		jurisdiction qualifies to be recognized as a
13		qualified jurisdiction, the Director shall publish
14		notice and evidence of such recognition in an
15		appropriate manner. The Director may establish a
16		procedure to withdraw recognition of those
17		jurisdictions that are no longer qualified.
18		(d) The Director shall consider the list of
19		qualified jurisdictions through the NAIC committee
20		process in determining qualified jurisdictions. If
21		the Director approves a jurisdiction as qualified
22		that does not appear on the list of qualified
23		jurisdictions, then the Director shall provide
24		thoroughly documented justification in accordance
25		with criteria to be developed under regulations.
26		(e) U.S. jurisdictions that meet the

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1		requirement for accreditation under the NAIC
2		financial standards and accreditation program
3		shall be recognized as qualified jurisdictions.
4		(f) If a certified reinsurer's domiciliary
5		jurisdiction ceases to be a qualified
6		jurisdiction, then the Director may suspend the
7		reinsurer's certification indefinitely, in lieu of
8		revocation.
9		(4) If an applicant for certification has been
10		certified as a reinsurer in an NAIC accredited
11		jurisdiction, then the Director may defer to that
12		jurisdiction's certification and to the rating
13		assigned by that jurisdiction if the assuming insurer
14		submits a properly executed Form CR-1 and such
15		additional information as the Director requires. Such
16		assuming insurer shall be considered to be a certified
17		reinsurer in this State but only upon the Director's
18		assignment of an Illinois rating, which shall be made
19		based on the requirements of subparagraph (5) of this
20		paragraph (C-5). The following shall apply:
21		(a) Any change in the certified reinsurer's
22		status or rating in the other jurisdiction shall
23		apply automatically in Illinois as of the date it
24		takes effect in the other jurisdiction. The
25		certified reinsurer shall notify the Director of
26		any change in its status or rating within 10 days

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1		after receiving notice of the change.
2		(b) The Director may withdraw recognition of
3		the other jurisdiction's rating at any time and
4		assign a new rating in accordance with
5		subparagraph (5) of this paragraph (C-5).
6		(c) The Director may withdraw recognition of
7		the other jurisdiction's certification at any time
8		with written notice to the certified reinsurer.
9		Unless the Director suspends or revokes the
10		certified reinsurer's certification in accordance
11		with item (c) of subparagraph (9) of this
12		paragraph (C-5), the certified reinsurer's
13		certification shall remain in good standing in
14		Illinois for a period of 3 months, which shall be
15		extended if additional time is necessary to
16		consider the assuming insurer's application for
17		certification in Illinois.
18		(5) The Director shall assign a rating to each
19		certified reinsurer pursuant to rules adopted by the
20		Department. Factors that shall be considered as part
21		of the evaluation process include the following:
22		(a) The certified reinsurer's financial
23		strength rating from an acceptable rating agency.
24		Financial strength ratings shall be classified
25		according to the following ratings categories:
26		(i) Ratings Category "Secure - 1"

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1		corresponds to the highest level of rating
2		given by a rating agency, including, but not
3		limited to, A.M. Best Company rating A++;
4		Standard & Poor's rating AAA; Moody's
5		Investors Service rating Aaa; and Fitch
6		Ratings rating AAA.
7		(ii) Ratings Category "Secure - 2"
8		corresponds to the second-highest level of
9		rating or group of ratings given by a rating
10		agency, including, but not limited to, A.M.
11		Best Company rating A+; Standard & Poor's
12		rating AA+, AA, or AA-; Moody's Investors
13		Service ratings Aa1, Aa2, or Aa3; and Fitch
14		Ratings ratings AA+, AA, or AA-.
15		(iii) Ratings Category "Secure - 3"
16		corresponds to the third-highest level of
17		rating or group of ratings given by a rating
18		agency, including, but not limited to, A.M.
19		Best Company rating A; Standard & Poor's
20		ratings A+ or A; Moody's Investors Service
21		ratings A1 or A2; and Fitch Ratings ratings A+
22		or A.
23		(iv) Ratings Category "Secure - 4"
24		corresponds to the fourth-highest level of
25		rating or group of ratings given by a rating
26		agency, including, but not limited to, A.M.

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1		Best Company rating A-; Standard & Poor's
2		rating A-; Moody's Investors Service rating
3		A3; and Fitch Ratings rating A-.
4		(v) Ratings Category "Secure - 5"
5		corresponds to the fifth-highest level of
6		rating or group of ratings given by a rating
7		agency, including, but not limited to, A.M.
8		Best Company ratings B++ or B+; Standard &
9		Poor's ratings BBB+, BBB, or BBB-; Moody's
10		Investors Service ratings Baa1, Baa2, or Baa3;
11		and Fitch Ratings ratings BBB+, BBB, or BBB-.
12		(vi) Ratings Category "Vulnerable - 6"
13		corresponds to a level of rating given by a
14		rating agency, other than those described in
15		subitems (i) through (v) of this item (a),
16		including, but not limited to, A.M. Best
17		Company rating B, B-, C++, C+, C, C-, D, E, or
18		F; Standard & Poor's ratings BB+, BB, BB-, B+,
19		B, B-, CCC, CC, C, D, or R; Moody's Investors
20		Service ratings Ba1, Ba2, Ba3, B1, B2, B3,
21		Caa, Ca, or C; and Fitch Ratings ratings BB+,
22		BB, BB-, B+, B, B-, CCC+, CCC, CCC-, or D.
23		A failure to obtain or maintain at least 2
24		financial strength ratings from acceptable rating
25		agencies shall result in loss of eligibility for
26		certification.

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1		(b) The business practices of the certified
2		reinsurer in dealing with its ceding insurers,
3		including its record of compliance with
4		reinsurance contractual terms and obligations.
5		(c) For certified reinsurers domiciled in the
6		U.S., a review of the most recent applicable NAIC
7		Annual Statement Blank, either Schedule F (for
8		property and casualty reinsurers) or Schedule S
9		(for life and health reinsurers).
10		(d) For certified reinsurers not domiciled in
11		the U.S., a review annually of Form CR-F (for
12		property and casualty reinsurers) or Form CR-S
13		(for life and health reinsurers).
14		(e) The reputation of the certified reinsurer
15		for prompt payment of claims under reinsurance
16		agreements, based on an analysis of ceding
17		insurers' Schedule F reporting of overdue
18		reinsurance recoverables, including the proportion
19		of obligations that are more than 90 days past due
20		or are in dispute, with specific attention given
21		to obligations payable to companies that are in
22		administrative supervision or receivership.
23		(f) Regulatory actions against the certified
24		reinsurer.
25		(g) The report of the independent auditor on
26		the financial statements of the insurance

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1		enterprise, on the basis described in item (h) of
2		this subparagraph (5).
3		(h) For certified reinsurers not domiciled in
4		the U.S., audited financial statements (audited
5		Generally Accepted Accounting Principles (U.S.
6		GAAP) basis statement if available, audited
7		International Financial Reporting Standards (IFRS)
8		basis statements are allowed but must include an
9		audited footnote reconciling equity and net income
10		to U.S. GAAP basis or, with the permission of the
11		Director, audited IFRS basis statements with
12		reconciliation to U.S. GAAP basis certified by an
13		officer of the company), regulatory filings, and
14		actuarial opinion (as filed with the non-U.S.
15		jurisdiction supervisor). Upon the initial
16		application for certification, the Director shall
17		consider the audited financial statements filed
18		with its non-U.S. jurisdiction supervisor for the
19		3 years immediately preceding the date of the
20		initial application for certification.
21		(i) The liquidation priority of obligations to
22		a ceding insurer in the certified reinsurer's
23		domiciliary jurisdiction in the context of an
24		insolvency proceeding.
25		(j) A certified reinsurer's participation in
26		any solvent scheme of arrangement, or similar

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1		procedure, that involves U.S. ceding insurers. The
2		Director shall receive prior notice from a
3		certified reinsurer that proposes participation by
4		the certified reinsurer in a solvent scheme of
5		arrangement.
6		The maximum rating that a certified reinsurer may
7		be assigned shall correspond to its financial strength
8		rating, which shall be determined according to
9		subitems (i) through (vi) of item (a) of this
10		subparagraph (5). The Director shall use the lowest
11		financial strength rating received from an acceptable
12		rating agency in establishing the maximum rating of a
13		certified reinsurer.
14		(6) Based on the analysis conducted under item (e)
15		of subparagraph (5) of this paragraph (C-5) of a
16		certified reinsurer's reputation for prompt payment of
17		claims, the Director may make appropriate adjustments
18		in the security the certified reinsurer is required to
19		post to protect its liabilities to U.S. ceding
20		insurers, provided that the Director shall, at a
21		minimum, increase the security the certified reinsurer
22		is required to post by one rating level under item (a)
23		of subparagraph (8) of this paragraph (C-5) if the
24		Director finds that:
25		(a) more than 15% of the certified reinsurer's
26		ceding insurance clients have overdue reinsurance

SB3865 Engrossed - 304 - LRB102 24242 RJF 33473 b
1		recoverables on paid losses of 90 days or more
2		that are not in dispute and that exceed $100,000
3		for each cedent; or
4		(b) the aggregate amount of reinsurance
5		recoverables on paid losses that are not in
6		dispute that are overdue by 90 days or more
7		exceeds $50,000,000.
8		(7) The Director shall post notice on the
9		Department's website promptly upon receipt of any
10		application for certification, including instructions
11		on how members of the public may respond to the
12		application. The Director may not take final action on
13		the application until at least 30 days after posting
14		the notice required by this subparagraph. The Director
15		shall publish a list of all certified reinsurers and
16		their ratings.
17		(8) A certified reinsurer shall secure obligations
18		assumed from U.S. ceding insurers under this
19		subsection (1) at a level consistent with its rating.
20		(a) The amount of security required in order
21		for full credit to be allowed shall correspond
22		with the applicable ratings category:
23		Secure - 1: 0%.
24		Secure - 2: 10%.
25		Secure - 3: 20%.
26		Secure - 4: 50%.

SB3865 Engrossed - 305 - LRB102 24242 RJF 33473 b
1		Secure - 5: 75%.
2		Vulnerable - 6: 100%.
3		(b) Nothing in this subparagraph (8) shall
4		prohibit the parties to a reinsurance agreement
5		from agreeing to provisions establishing security
6		requirements that exceed the minimum security
7		requirements established for certified reinsurers
8		under this Section.
9		(c) In order for a domestic ceding insurer to
10		qualify for full financial statement credit for
11		reinsurance ceded to a certified reinsurer, the
12		certified reinsurer shall maintain security in a
13		form acceptable to the Director and consistent
14		with the provisions of subsection (2) of this
15		Section, or in a multibeneficiary trust in
16		accordance with paragraph (C) of this subsection
17		(1), except as otherwise provided in this
18		subparagraph (8).
19		(d) If a certified reinsurer maintains a trust
20		to fully secure its obligations subject to
21		paragraph (C) of this subsection (1), and chooses
22		to secure its obligations incurred as a certified
23		reinsurer in the form of a multibeneficiary trust,
24		then the certified reinsurer shall maintain
25		separate trust accounts for its obligations
26		incurred under reinsurance agreements issued or

SB3865 Engrossed - 306 - LRB102 24242 RJF 33473 b
1		renewed as a certified reinsurer with reduced
2		security as permitted by this subsection or
3		comparable laws of other U.S. jurisdictions and
4		for its obligations subject to paragraph (C) of
5		this subsection (1). It shall be a condition to
6		the grant of certification under this paragraph
7		(C-5) that the certified reinsurer shall have
8		bound itself, by the language of the trust and
9		agreement with the Director with principal
10		regulatory oversight of each such trust account,
11		to fund, upon termination of any such trust
12		account, out of the remaining surplus of such
13		trust any deficiency of any other such trust
14		account. The certified reinsurer shall also
15		provide or make available, if requested by a
16		beneficiary under a trust, all the information
17		that is required to be provided under the
18		requirements of item (d) of subparagraph (2) of
19		paragraph (C) of this subsection (1) to the
20		certified reinsurer's U.S. ceding insurers or
21		their assigns and successors in interest. The
22		assuming insurer may decline to release trade
23		secrets or commercially sensitive information that
24		would qualify as exempt from disclosure under the
25		Freedom of Information Act.
26		(e) The minimum trusteed surplus requirements

SB3865 Engrossed - 307 - LRB102 24242 RJF 33473 b
1		provided in paragraph (C) of this subsection (1)
2		are not applicable with respect to a
3		multibeneficiary trust maintained by a certified
4		reinsurer for the purpose of securing obligations
5		incurred under this subsection, except that such
6		trust shall maintain a minimum trusteed surplus of
7		$10,000,000.
8		(f) With respect to obligations incurred by a
9		certified reinsurer under this subsection (1), if
10		the security is insufficient, then the Director
11		may reduce the allowable credit by an amount
12		proportionate to the deficiency and may impose
13		further reductions in allowable credit upon
14		finding that there is a material risk that the
15		certified reinsurer's obligations will not be paid
16		in full when due.
17		(9)(a) In the case of a downgrade by a rating
18		agency or other disqualifying circumstance, the
19		Director shall by written notice assign a new rating
20		to the certified reinsurer in accordance with the
21		requirements of subparagraph (5) of this paragraph
22		(C-5).
23		(b) If the rating of a certified reinsurer is
24		upgraded by the Director, then the certified reinsurer
25		may meet the security requirements applicable to its
26		new rating on a prospective basis, but the Director

SB3865 Engrossed - 308 - LRB102 24242 RJF 33473 b
1		shall require the certified reinsurer to post security
2		under the previously applicable security requirements
3		as to all contracts in force on or before the effective
4		date of the upgraded rating. If the rating of a
5		certified reinsurer is downgraded by the Director,
6		then the Director shall require the certified
7		reinsurer to meet the security requirements applicable
8		to its new rating for all business it has assumed as a
9		certified reinsurer.
10		(c) The Director may suspend, revoke, or otherwise
11		modify a certified reinsurer's certification at any
12		time if the certified reinsurer fails to meet its
13		obligations or security requirements under this
14		Section or if other financial or operating results of
15		the certified reinsurer, or documented significant
16		delays in payment by the certified reinsurer, lead the
17		Director to reconsider the certified reinsurer's
18		ability or willingness to meet its contractual
19		obligations. In seeking to suspend, revoke, or
20		otherwise modify a certified reinsurer's
21		certification, the Director shall follow the
22		procedures provided in paragraph (G) of this
23		subsection (1).
24		(d) For purposes of this subsection (1), a
25		certified reinsurer whose certification has been
26		terminated for any reason shall be treated as a

SB3865 Engrossed - 309 - LRB102 24242 RJF 33473 b
1		certified reinsurer required to secure 100% of its
2		obligations.
3		(i) As used in this item (d), the term
4		"terminated" refers to revocation, suspension,
5		voluntary surrender and inactive status.
6		(ii) If the Director continues to assign a
7		higher rating as permitted by other provisions of
8		this Section, then this requirement does not apply
9		to a certified reinsurer in inactive status or to
10		a reinsurer whose certification has been
11		suspended.
12		(e) Upon revocation of the certification of a
13		certified reinsurer by the Director, the assuming
14		insurer shall be required to post security in
15		accordance with subsection (2) of this Section in
16		order for the ceding insurer to continue to take
17		credit for reinsurance ceded to the assuming insurer.
18		If funds continue to be held in trust, then the
19		Director may allow additional credit equal to the
20		ceding insurer's pro rata share of the funds,
21		discounted to reflect the risk of uncollectibility and
22		anticipated expenses of trust administration.
23		(f) Notwithstanding the change of a certified
24		reinsurer's rating or revocation of its certification,
25		a domestic insurer that has ceded reinsurance to that
26		certified reinsurer may not be denied credit for

SB3865 Engrossed - 310 - LRB102 24242 RJF 33473 b
1		reinsurance for a period of 3 months for all
2		reinsurance ceded to that certified reinsurer, unless
3		the reinsurance is found by the Director to be at high
4		risk of uncollectibility.
5		(10) A certified reinsurer that ceases to assume
6		new business in this State may request to maintain its
7		certification in inactive status in order to continue
8		to qualify for a reduction in security for its
9		in-force business. An inactive certified reinsurer
10		shall continue to comply with all applicable
11		requirements of this subsection (1), and the Director
12		shall assign a rating that takes into account, if
13		relevant, the reasons why the reinsurer is not
14		assuming new business.
15		(11) Credit for reinsurance under this paragraph
16		(C-5) shall apply only to reinsurance contracts
17		entered into or renewed on or after the effective date
18		of the certification of the assuming insurer.
19		(12) The Director shall comply with all reporting
20		and notification requirements that may be established
21		by the NAIC with respect to certified reinsurers and
22		qualified jurisdictions.
23		(D) Credit shall be allowed when the reinsurance is
24		ceded to an assuming insurer not meeting the requirements
25		of paragraph (A), (B), or (C) of this subsection (1) but
26		only with respect to the insurance of risks located in

SB3865 Engrossed - 311 - LRB102 24242 RJF 33473 b
1		jurisdictions where that reinsurance is required by
2		applicable law or regulation of that jurisdiction.
3		(E) If the assuming insurer is not licensed to
4		transact insurance in this State or an accredited or
5		certified reinsurer in this State, the credit permitted by
6		paragraphs (B-5) and (C) of this subsection (1) shall not
7		be allowed unless the assuming insurer agrees in the
8		reinsurance agreements:
9		(1) that in the event of the failure of the
10		assuming insurer to perform its obligations under the
11		terms of the reinsurance agreement, the assuming
12		insurer, at the request of the ceding insurer, shall
13		submit to the jurisdiction of any court of competent
14		jurisdiction in any state of the United States, will
15		comply with all requirements necessary to give the
16		court jurisdiction, and will abide by the final
17		decision of the court or of any appellate court in the
18		event of an appeal; and
19		(2) to designate the Director or a designated
20		attorney as its true and lawful attorney upon whom may
21		be served any lawful process in any action, suit, or
22		proceeding instituted by or on behalf of the ceding
23		company.
24		This provision is not intended to conflict with or
25		override the obligation of the parties to a reinsurance
26		agreement to arbitrate their disputes, if an obligation to

SB3865 Engrossed - 312 - LRB102 24242 RJF 33473 b
1		arbitrate is created in the agreement.
2		(F) If the assuming insurer does not meet the
3		requirements of paragraph (A) or (B) of this subsection
4		(1), the credit permitted by paragraph (C) of this
5		subsection (1) shall not be allowed unless the assuming
6		insurer agrees in the trust agreements to the following
7		conditions:
8		(1) Notwithstanding any other provisions in the
9		trust instrument, if the trust fund is inadequate
10		because it contains an amount less than the amount
11		required by subparagraph (3) of paragraph (C) of this
12		subsection (1) or if the grantor of the trust has been
13		declared insolvent or placed into receivership,
14		rehabilitation, liquidation, or similar proceedings
15		under the laws of its state or country of domicile, the
16		trustee shall comply with an order of the state
17		official with regulatory oversight over the trust or
18		with an order of a court of competent jurisdiction
19		directing the trustee to transfer to the state
20		official with regulatory oversight all of the assets
21		of the trust fund.
22		(2) The assets shall be distributed by and claims
23		shall be filed with and valued by the state official
24		with regulatory oversight in accordance with the laws
25		of the state in which the trust is domiciled that are
26		applicable to the liquidation of domestic insurance

SB3865 Engrossed - 313 - LRB102 24242 RJF 33473 b
1		companies.
2		(3) If the state official with regulatory
3		oversight determines that the assets of the trust fund
4		or any part thereof are not necessary to satisfy the
5		claims of the U.S. ceding insurers of the grantor of
6		the trust, the assets or part thereof shall be
7		returned by the state official with regulatory
8		oversight to the trustee for distribution in
9		accordance with the trust agreement.
10		(4) The grantor shall waive any rights otherwise
11		available to it under U.S. law that are inconsistent
12		with the provision.
13		(G) If an accredited or certified reinsurer ceases to
14		meet the requirements for accreditation or certification,
15		then the Director may suspend or revoke the reinsurer's
16		accreditation or certification.
17		(1) The Director must give the reinsurer notice
18		and opportunity for hearing. The suspension or
19		revocation may not take effect until after the
20		Director's order on hearing, unless:
21		(a) the reinsurer waives its right to hearing;
22		(b) the Director's order is based on
23		regulatory action by the reinsurer's domiciliary
24		jurisdiction or the voluntary surrender or
25		termination of the reinsurer's eligibility to
26		transact insurance or reinsurance business in its

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1		domiciliary jurisdiction or in the primary
2		certifying state of the reinsurer under
3		subparagraph (4) of paragraph (C-5) of this
4		subsection (1); or
5		(c) the Director finds that an emergency
6		requires immediate action and a court of competent
7		jurisdiction has not stayed the Director's action.
8		(2) While a reinsurer's accreditation or
9		certification is suspended, no reinsurance contract
10		issued or renewed after the effective date of the
11		suspension qualifies for credit except to the extent
12		that the reinsurer's obligations under the contract
13		are secured in accordance with subsection (2) of this
14		Section. If a reinsurer's accreditation or
15		certification is revoked, no credit for reinsurance
16		may be granted after the effective date of the
17		revocation, except to the extent that the reinsurer's
18		obligations under the contract are secured in
19		accordance with subsection (2) of this Section.
20		(H) The following provisions shall apply concerning
21		concentration of risk:
22		(1) A ceding insurer shall take steps to manage
23		its reinsurance recoverable proportionate to its own
24		book of business. A domestic ceding insurer shall
25		notify the Director within 30 days after reinsurance
26		recoverables from any single assuming insurer, or

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1		group of affiliated assuming insurers, exceeds 50% of
2		the domestic ceding insurer's last reported surplus to
3		policyholders, or after it is determined that
4		reinsurance recoverables from any single assuming
5		insurer, or group of affiliated assuming insurers, is
6		likely to exceed this limit. The notification shall
7		demonstrate that the exposure is safely managed by the
8		domestic ceding insurer.
9		(2) A ceding insurer shall take steps to diversify
10		its reinsurance program. A domestic ceding insurer
11		shall notify the Director within 30 days after ceding
12		to any single assuming insurer, or group of affiliated
13		assuming insurers, more than 20% of the ceding
14		insurer's gross written premium in the prior calendar
15		year, or after it has determined that the reinsurance
16		ceded to any single assuming insurer, or group of
17		affiliated assuming insurers, is likely to exceed this
18		limit. The notification shall demonstrate that the
19		exposure is safely managed by the domestic ceding
20		insurer.
21		(2) Credit for the reinsurance ceded by a domestic insurer
22		to an assuming insurer not meeting the requirements of
23		subsection (1) of this Section shall be allowed in an amount
24		not exceeding the assets or liabilities carried by the ceding
25		insurer. The credit shall not exceed the amount of funds held
26		by or held in trust for the ceding insurer under a reinsurance

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1		contract with the assuming insurer as security for the payment
2		of obligations thereunder, if the security is held in the
3		United States subject to withdrawal solely by, and under the
4		exclusive control of, the ceding insurer; or, in the case of a
5		trust, held in a qualified United States financial
6		institution, as defined in paragraph (B) of subsection (3) of
7		this Section. This security may be in the form of:
8		(A) Cash.
9		(B) Securities listed by the Securities Valuation
10		Office of the National Association of Insurance
11		Commissioners, including those deemed exempt from filing
12		as defined by the Purposes and Procedures Manual of the
13		Securities Valuation Office that conform to the
14		requirements of Article VIII of this Code that are not
15		issued by an affiliate of either the assuming or ceding
16		company.
17		(C) Clean, irrevocable, unconditional, letters of
18		credit issued or confirmed by a qualified United States
19		financial institution, as defined in paragraph (A) of
20		subsection (3) of this Section. The letters of credit
21		shall be effective no later than December 31 of the year
22		for which filing is being made, and in the possession of,
23		or in trust for, the ceding company on or before the filing
24		date of its annual statement. Letters of credit meeting
25		applicable standards of issuer acceptability as of the
26		dates of their issuance (or confirmation) shall,

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1		notwithstanding the issuing (or confirming) institution's
2		subsequent failure to meet applicable standards of issuer
3		acceptability, continue to be acceptable as security until
4		their expiration, extension, renewal, modification, or
5		amendment, whichever first occurs.
6		(D) Any other form of security acceptable to the
7		Director.
8		(3)(A) For purposes of paragraph (C) of subsection (2) of
9		this Section, a "qualified United States financial
10		institution" means an institution that:
11		(1) is organized or, in the case of a U.S. office of a
12		foreign banking organization, licensed under the laws of
13		the United States or any state thereof;
14		(2) is regulated, supervised, and examined by U.S.
15		federal or state authorities having regulatory authority
16		over banks and trust companies;
17		(3) has been designated by either the Director or the
18		Securities Valuation Office of the National Association of
19		Insurance Commissioners as meeting such standards of
20		financial condition and standing as are considered
21		necessary and appropriate to regulate the quality of
22		financial institutions whose letters of credit will be
23		acceptable to the Director; and
24		(4) is not affiliated with the assuming company.
25		(B) A "qualified United States financial institution"
26		means, for purposes of those provisions of this law specifying

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1		those institutions that are eligible to act as a fiduciary of a
2		trust, an institution that:
3		(1) is organized or, in the case of the U.S. branch or
4		agency office of a foreign banking organization, licensed
5		under the laws of the United States or any state thereof
6		and has been granted authority to operate with fiduciary
7		powers;
8		(2) is regulated, supervised, and examined by federal
9		or state authorities having regulatory authority over
10		banks and trust companies; and
11		(3) is not affiliated with the assuming company,
12		however, if the subject of the reinsurance contract is
13		insurance written pursuant to Section 155.51 of this Code,
14		the financial institution may be affiliated with the
15		assuming company with the prior approval of the Director.
16		(C) Except as set forth in subparagraph (11) of paragraph
17		(C-5) of subsection (1) of this Section as to cessions by
18		certified reinsurers, this amendatory Act of the 100th General
19		Assembly shall apply to all cessions after the effective date
20		of this amendatory Act of the 100th General Assembly under
21		reinsurance agreements that have an inception, anniversary, or
22		renewal date not less than 6 months after the effective date of
23		this amendatory Act of the 100th General Assembly.
24		(D) The Department shall adopt rules implementing the
25		provisions of this Article.
26		(Source: P.A. 100-1118, eff. 11-27-18.)

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1		(Text of Section after amendment by P.A. 102-578)
2		Sec. 173.1. Credit allowed a domestic ceding insurer.
3		(1) Except as otherwise provided under Article VIII 1/2 of
4		this Code and related provisions of the Illinois
5		Administrative Code, credit for reinsurance shall be allowed a
6		domestic ceding insurer as either an admitted asset or a
7		deduction from liability on account of reinsurance ceded only
8		when the reinsurer meets the requirements of paragraph (A),
9		(B), (B-5), (C), (C-5), (C-10), or (D) of this subsection (1).
10		Credit shall be allowed under paragraph (A), (B), or (B-5) of
11		this subsection (1) only as respects cessions of those kinds
12		or classes of business in which the assuming insurer is
13		licensed or otherwise permitted to write or assume in its
14		state of domicile, or in the case of a U.S. branch of a
15		non-domestic an alien assuming insurer, in the state through
16		which it is entered and licensed to transact insurance or
17		reinsurance. Credit shall be allowed under paragraph (B-5) or
18		(C) of this subsection (1) only if the applicable requirements
19		of paragraph (E) of this subsection (1) have been satisfied.
20		(A) Credit shall be allowed when the reinsurance is
21		ceded to an assuming insurer that is authorized in this
22		State to transact the types of insurance ceded and has at
23		least $5,000,000 in capital and surplus.
24		(B) Credit shall be allowed when the reinsurance is
25		ceded to an assuming insurer that is accredited as a

SB3865 Engrossed - 320 - LRB102 24242 RJF 33473 b
1		reinsurer in this State. An accredited reinsurer is one
2		that:
3		(1) files with the Director evidence of its
4		submission to this State's jurisdiction;
5		(2) submits to this State's authority to examine
6		its books and records;
7		(3) is licensed to transact insurance or
8		reinsurance in at least one state, or in the case of a
9		U.S. branch of a non-domestic an alien assuming
10		insurer is entered through and licensed to transact
11		insurance or reinsurance in at least one state;
12		(4) files annually with the Director a copy of its
13		annual statement filed with the insurance department
14		of its state of domicile and a copy of its most recent
15		audited financial statement; and
16		(5) maintains a surplus as regards policyholders
17		in an amount that is not less than $20,000,000 and
18		whose accreditation has been approved by the Director.
19		(B-5)(1) Credit shall be allowed when the reinsurance
20		is ceded to an assuming insurer that is domiciled in, or in
21		the case of a U.S. branch of a non-domestic an alien
22		assuming insurer is entered through, a state that employs
23		standards regarding credit for reinsurance substantially
24		similar to those applicable under this Code and the
25		assuming insurer or U.S. branch of a non-domestic an alien
26		assuming insurer:

SB3865 Engrossed - 321 - LRB102 24242 RJF 33473 b
1		(a) maintains a surplus as regards policyholders
2		in an amount not less than $20,000,000; and
3		(b) submits to the authority of this State to
4		examine its books and records.
5		(2) The requirement of item (a) of subparagraph (1) of
6		paragraph (B-5) of this subsection (1) does not apply to
7		reinsurance ceded and assumed pursuant to pooling
8		arrangements among insurers in the same holding company
9		system.
10		(C)(1) Credit shall be allowed when the reinsurance
11		is ceded to an assuming insurer that maintains a trust
12		fund in a qualified United States financial institution,
13		as defined in paragraph (B) of subsection (3) of this
14		Section, for the payment of the valid claims of its United
15		States policyholders and ceding insurers, their assigns
16		and successors in interest. The assuming insurer shall
17		report to the Director information substantially the same
18		as that required to be reported on the NAIC annual and
19		quarterly financial statement by authorized insurers and
20		any other financial information that the Director deems
21		necessary to determine the financial condition of the
22		assuming insurer and the sufficiency of the trust fund.
23		The assuming insurer shall provide or make the information
24		available to the ceding insurer. The assuming insurer may
25		decline to release trade secrets or commercially sensitive
26		information that would qualify as exempt from disclosure

SB3865 Engrossed - 322 - LRB102 24242 RJF 33473 b
1		under the Freedom of Information Act. The Director shall
2		also make the information publicly available, subject only
3		to such reasonable objections as might be raised to a
4		request pursuant to the Freedom of Information Act, as
5		determined by the Director. The assuming insurer shall
6		submit to examination of its books and records by the
7		Director and bear the expense of examination.
8		(2)(a) Credit for reinsurance shall not be granted
9		under this subsection unless the form of the trust and any
10		amendments to the trust have been approved by:
11		(i) the regulatory official of the state where the
12		trust is domiciled; or
13		(ii) the regulatory official of another state who,
14		pursuant to the terms of the trust instrument, has
15		accepted principal regulatory oversight of the trust.
16		(b) The form of the trust and any trust amendments
17		also shall be filed with the regulatory official of every
18		state in which the ceding insurer beneficiaries of the
19		trust are domiciled. The trust instrument shall provide
20		that contested claims shall be valid and enforceable upon
21		the final order of any court of competent jurisdiction in
22		the United States. The trust shall vest legal title to its
23		assets in its trustees for the benefit of the assuming
24		insurer's United States policyholders and ceding insurees
25		and their assigns and successors in interest. The trust
26		and the assuming insurer shall be subject to examination

SB3865 Engrossed - 323 - LRB102 24242 RJF 33473 b
1		as determined by the Director.
2		(c) The trust shall remain in effect for as long as the
3		assuming insurer has outstanding obligations due under the
4		reinsurance agreements subject to the trust. No later than
5		February 28 of each year the trustee of the trust shall
6		report to the Director in writing the balance of the trust
7		and a list of the trust's investments at the preceding
8		year-end and shall certify the date of termination of the
9		trust, if so planned, or certify that the trust will not
10		expire prior to the next following December 31.
11		No later than February 28 of each year, the assuming
12		insurer's chief executive officer or chief financial
13		officer shall certify to the Director that the trust fund
14		contains funds in an amount not less than the assuming
15		insurer's liabilities (as reported to the assuming insurer
16		by its cedent) attributable to reinsurance ceded by U.S.
17		ceding insurers, and in addition, a trusteed surplus of no
18		less than $20,000,000. In the event that item (a-5) of
19		subparagraph (3) of this paragraph (C) applies to the
20		trust, the assuming insurer's chief executive officer or
21		chief financial officer shall then certify to the Director
22		that the trust fund contains funds in an amount not less
23		than the assuming insurer's liabilities (as reported to
24		the assuming insurer by its cedent) attributable to
25		reinsurance ceded by U.S. ceding insurers and, in
26		addition, a reduced trusteed surplus of not less than the

SB3865 Engrossed - 324 - LRB102 24242 RJF 33473 b
1		amount that has been authorized by the regulatory
2		authority having principal regulatory oversight of the
3		trust.
4		(d) No later than February 28 of each year, an
5		assuming insurer that maintains a trust fund in accordance
6		with this paragraph (C) shall provide or make available,
7		if requested by a beneficiary under the trust fund, the
8		following information to the assuming insurer's U.S.
9		ceding insurers or their assigns and successors in
10		interest:
11		(i) a copy of the form of the trust agreement and
12		any trust amendments to the trust agreement pertaining
13		to the trust fund;
14		(ii) a copy of the annual and quarterly financial
15		information, and its most recent audited financial
16		statement provided to the Director by the assuming
17		insurer, including any exhibits and schedules thereto;
18		(iii) any financial information provided to the
19		Director by the assuming insurer that the Director has
20		deemed necessary to determine the financial condition
21		of the assuming insurer and the sufficiency of the
22		trust fund;
23		(iv) a copy of any annual and quarterly financial
24		information provided to the Director by the trustee of
25		the trust fund maintained by the assuming insurer,
26		including any exhibits and schedules thereto;

SB3865 Engrossed - 325 - LRB102 24242 RJF 33473 b
1		(v) a copy of the information required to be
2		reported by the trustee of the trust to the Director
3		under the provisions of this paragraph (C); and
4		(vi) a written certification that the trust fund
5		consists of funds in trust in an amount not less than
6		the assuming insurer's liabilities attributable to
7		reinsurance liabilities (as reported to the assuming
8		insurer by its cedent) attributable to reinsurance
9		ceded by U.S. ceding insurers and, in addition, a
10		trusteed surplus of not less than $20,000,000.
11		(3) The following requirements apply to the following
12		categories of assuming insurer:
13		(a) The trust fund for a single assuming insurer
14		shall consist of funds in trust in an amount not less
15		than the assuming insurer's liabilities attributable
16		to reinsurance ceded by U.S. ceding insurers, and in
17		addition, the assuming insurer shall maintain a
18		trusteed surplus of not less than $20,000,000, except
19		as provided in item (a-5) of this subparagraph (3).
20		(a-5) At any time after the assuming insurer has
21		permanently discontinued underwriting new business
22		secured by the trust for at least 3 full years, the
23		Director with principal regulatory oversight of the
24		trust may authorize a reduction in the required
25		trusteed surplus, but only after a finding, based on
26		an assessment of the risk, that the new required

SB3865 Engrossed - 326 - LRB102 24242 RJF 33473 b
1		surplus level is adequate for the protection of U.S.
2		ceding insurers, policyholders, and claimants in light
3		of reasonably foreseeable adverse loss development.
4		The risk assessment may involve an actuarial review,
5		including an independent analysis of reserves and cash
6		flows, and shall consider all material risk factors,
7		including, when applicable, the lines of business
8		involved, the stability of the incurred loss
9		estimates, and the effect of the surplus requirements
10		on the assuming insurer's liquidity or solvency. The
11		minimum required trusteed surplus may not be reduced
12		to an amount less than 30% of the assuming insurer's
13		liabilities attributable to reinsurance ceded by U.S.
14		ceding insurers covered by the trust.
15		(b)(i) In the case of a group including
16		incorporated and individual unincorporated
17		underwriters:
18		(I) for reinsurance ceded under reinsurance
19		agreements with an inception, amendment, or
20		renewal date on or after January 1, 1993, the
21		trust shall consist of a trusteed account in an
22		amount not less than the respective underwriters'
23		several liabilities attributable to business ceded
24		by U.S. domiciled ceding insurers to any member of
25		the group;
26		(II) for reinsurance ceded under reinsurance

SB3865 Engrossed - 327 - LRB102 24242 RJF 33473 b
1		agreements with an inception date on or before
2		December 31, 1992 and not amended or renewed after
3		that date, notwithstanding the other provisions of
4		this Act, the trust shall consist of a trusteed
5		account in an amount not less than the group's
6		several insurance and reinsurance liabilities
7		attributable to business written in the United
8		States; and
9		(III) in addition to these trusts, the group
10		shall maintain in trust a trusteed surplus of
11		which not less than $100,000,000 shall be held
12		jointly for the benefit of the U.S. domiciled
13		ceding insurers of any member of the group for all
14		years of account.
15		(ii) The incorporated members of the group shall
16		not be engaged in any business other than underwriting
17		as a member of the group and shall be subject to the
18		same level of solvency regulation and control by the
19		group's domiciliary regulator as are the
20		unincorporated members.
21		(iii) Within 90 days after its financial
22		statements are due to be filed with the group's
23		domiciliary regulator, the group shall provide to the
24		Director an annual certification by the group's
25		domiciliary regulator of the solvency of each
26		underwriter member, or if a certification is

SB3865 Engrossed - 328 - LRB102 24242 RJF 33473 b
1		unavailable, financial statements prepared by
2		independent public accountants of each underwriter
3		member of the group.
4		(c) In the case of a group of incorporated
5		insurers under common administration, the group shall:
6		(i) have continuously transacted an insurance
7		business outside the United States for at least 3
8		years immediately before making application for
9		accreditation;
10		(ii) maintain aggregate policyholders' surplus
11		of not less than $10,000,000,000;
12		(iii) maintain a trust in an amount not less
13		than the group's several liabilities attributable
14		to business ceded by United States domiciled
15		ceding insurers to any member of the group
16		pursuant to reinsurance contracts issued in the
17		name of the group;
18		(iv) in addition, maintain a joint trusteed
19		surplus of which not less than $100,000,000 shall
20		be held jointly for the benefit of the United
21		States ceding insurers of any member of the group
22		as additional security for these liabilities; and
23		(v) within 90 days after its financial
24		statements are due to be filed with the group's
25		domiciliary regulator, make available to the
26		Director an annual certification of each

SB3865 Engrossed - 329 - LRB102 24242 RJF 33473 b
1		underwriter member's solvency by the member's
2		domiciliary regulator and financial statements of
3		each underwriter member of the group prepared by
4		its independent public accountant.
5		(C-5) Credit shall be allowed when the reinsurance is
6		ceded to an assuming insurer that has been certified by
7		the Director as a reinsurer in this State and secures its
8		obligations in accordance with the requirements of this
9		paragraph (C-5).
10		(1) In order to be eligible for certification, the
11		assuming insurer shall meet the following
12		requirements:
13		(a) the assuming insurer must be domiciled and
14		licensed to transact insurance or reinsurance in a
15		qualified jurisdiction, as determined by the
16		Director pursuant to subparagraph (3) of this
17		paragraph (C-5);
18		(b) the assuming insurer must maintain minimum
19		capital and surplus, or its equivalent, in an
20		amount not less than $250,000,000 or such greater
21		amount as determined by the Director pursuant to
22		regulation; this requirement may also be satisfied
23		by an association, including incorporated and
24		individual unincorporated underwriters, having
25		minimum capital and surplus equivalents (net of
26		liabilities) of at least $250,000,000 and a

SB3865 Engrossed - 330 - LRB102 24242 RJF 33473 b
1		central fund containing a balance of at least
2		$250,000,000;
3		(c) the assuming insurer must maintain
4		financial strength ratings from 2 or more rating
5		agencies deemed acceptable by the Director; these
6		ratings shall be based on interactive
7		communication between the rating agency and the
8		assuming insurer and shall not be based solely on
9		publicly available information; each certified
10		reinsurer shall be rated on a legal entity basis,
11		with due consideration being given to the group
12		rating where appropriate, except that an
13		association, including incorporated and individual
14		unincorporated underwriters, that has been
15		approved to do business as a single certified
16		reinsurer may be evaluated on the basis of its
17		group rating; these financial strength ratings
18		shall be one factor used by the Director in
19		determining the rating that is assigned to the
20		assuming insurer; acceptable rating agencies
21		include the following:
22		(i) Standard & Poor's;
23		(ii) Moody's Investors Service;
24		(iii) Fitch Ratings;
25		(iv) A.M. Best Company; or
26		(v) any other nationally recognized

SB3865 Engrossed - 331 - LRB102 24242 RJF 33473 b
1		statistical rating organization;
2		(d) the assuming insurer must agree to submit
3		to the jurisdiction of this State, appoint the
4		Director as its agent for service of process in
5		this State, and agree to provide security for 100%
6		of the assuming insurer's liabilities attributable
7		to reinsurance ceded by U.S. ceding insurers if it
8		resists enforcement of a final U.S. judgment; and
9		(e) the assuming insurer must agree to meet
10		applicable information filing requirements as
11		determined by the Director, both with respect to
12		an initial application for certification and on an
13		ongoing basis.
14		(2) An association, including incorporated and
15		individual unincorporated underwriters, may be a
16		certified reinsurer. In order to be eligible for
17		certification, in addition to satisfying the
18		requirements of subparagraph (1) of this paragraph
19		(C-5):
20		(a) the association shall satisfy its minimum
21		capital and surplus requirements through the
22		capital and surplus equivalents (net of
23		liabilities) of the association and its members,
24		which shall include a joint central fund that may
25		be applied to any unsatisfied obligation of the
26		association or any of its members, in the amounts

SB3865 Engrossed - 332 - LRB102 24242 RJF 33473 b
1		specified in item (b) of subparagraph (1) of this
2		paragraph (C-5);
3		(b) the incorporated members of the
4		association shall not be engaged in any business
5		other than underwriting as a member of the
6		association and shall be subject to the same level
7		of regulation and solvency control by the
8		association's domiciliary regulator as are the
9		unincorporated members; and
10		(c) within 90 days after its financial
11		statements are due to be filed with the
12		association's domiciliary regulator, the
13		association shall provide to the Director an
14		annual certification by the association's
15		domiciliary regulator of the solvency of each
16		underwriter member; or if a certification is
17		unavailable, financial statements, prepared by
18		independent public accountants, of each
19		underwriter member of the association.
20		(3) The Director shall create and publish a list
21		of qualified jurisdictions, under which an assuming
22		insurer licensed and domiciled in such jurisdiction is
23		eligible to be considered for certification by the
24		Director as a certified reinsurer.
25		(a) In order to determine whether the
26		domiciliary jurisdiction of a non-U.S. assuming

SB3865 Engrossed - 333 - LRB102 24242 RJF 33473 b
1		insurer is eligible to be recognized as a
2		qualified jurisdiction, the Director shall
3		evaluate the appropriateness and effectiveness of
4		the reinsurance supervisory system of the
5		jurisdiction, both initially and on an ongoing
6		basis, and consider the rights, benefits, and
7		extent of reciprocal recognition afforded by the
8		non-U.S. jurisdiction to reinsurers licensed and
9		domiciled in the U.S. A qualified jurisdiction
10		must agree in writing to share information and
11		cooperate with the Director with respect to all
12		certified reinsurers domiciled within that
13		jurisdiction. A jurisdiction may not be recognized
14		as a qualified jurisdiction if the Director has
15		determined that the jurisdiction does not
16		adequately and promptly enforce final U.S.
17		judgments and arbitration awards. The costs and
18		expenses associated with the Director's review and
19		evaluation of the domiciliary jurisdictions of
20		non-U.S. assuming insurers shall be borne by the
21		certified reinsurer or reinsurers domiciled in
22		such jurisdiction.
23		(b) Additional factors to be considered in
24		determining whether to recognize a qualified
25		jurisdiction include, but are not limited to, the
26		following:

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1		(i) the framework under which the assuming
2		insurer is regulated;
3		(ii) the structure and authority of the
4		domiciliary regulator with regard to solvency
5		regulation requirements and financial
6		surveillance;
7		(iii) the substance of financial and
8		operating standards for assuming insurers in
9		the domiciliary jurisdiction;
10		(iv) the form and substance of financial
11		reports required to be filed or made publicly
12		available by reinsurers in the domiciliary
13		jurisdiction and the accounting principles
14		used;
15		(v) the domiciliary regulator's
16		willingness to cooperate with U.S. regulators
17		in general and the Director in particular;
18		(vi) the history of performance by
19		assuming insurers in the domiciliary
20		jurisdiction;
21		(vii) any documented evidence of
22		substantial problems with the enforcement of
23		final U.S. judgments in the domiciliary
24		jurisdiction; and
25		(viii) any relevant international
26		standards or guidance with respect to mutual

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1		recognition of reinsurance supervision adopted
2		by the International Association of Insurance
3		Supervisors or its successor organization.
4		(c) If, upon conducting an evaluation under
5		this paragraph with respect to the reinsurance
6		supervisory system of any non-U.S. assuming
7		insurer, the Director determines that the
8		jurisdiction qualifies to be recognized as a
9		qualified jurisdiction, the Director shall publish
10		notice and evidence of such recognition in an
11		appropriate manner. The Director may establish a
12		procedure to withdraw recognition of those
13		jurisdictions that are no longer qualified.
14		(d) The Director shall consider the list of
15		qualified jurisdictions through the NAIC committee
16		process in determining qualified jurisdictions. If
17		the Director approves a jurisdiction as qualified
18		that does not appear on the list of qualified
19		jurisdictions, then the Director shall provide
20		thoroughly documented justification in accordance
21		with criteria to be developed under regulations.
22		(e) U.S. jurisdictions that meet the
23		requirement for accreditation under the NAIC
24		financial standards and accreditation program
25		shall be recognized as qualified jurisdictions.
26		(f) If a certified reinsurer's domiciliary

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1		jurisdiction ceases to be a qualified
2		jurisdiction, then the Director may suspend the
3		reinsurer's certification indefinitely, in lieu of
4		revocation.
5		(4) If an applicant for certification has been
6		certified as a reinsurer in an NAIC accredited
7		jurisdiction, then the Director may defer to that
8		jurisdiction's certification and to the rating
9		assigned by that jurisdiction if the assuming insurer
10		submits a properly executed Form CR-1 and such
11		additional information as the Director requires. Such
12		assuming insurer shall be considered to be a certified
13		reinsurer in this State but only upon the Director's
14		assignment of an Illinois rating, which shall be made
15		based on the requirements of subparagraph (5) of this
16		paragraph (C-5). The following shall apply:
17		(a) Any change in the certified reinsurer's
18		status or rating in the other jurisdiction shall
19		apply automatically in Illinois as of the date it
20		takes effect in the other jurisdiction. The
21		certified reinsurer shall notify the Director of
22		any change in its status or rating within 10 days
23		after receiving notice of the change.
24		(b) The Director may withdraw recognition of
25		the other jurisdiction's rating at any time and
26		assign a new rating in accordance with

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1		subparagraph (5) of this paragraph (C-5).
2		(c) The Director may withdraw recognition of
3		the other jurisdiction's certification at any time
4		with written notice to the certified reinsurer.
5		Unless the Director suspends or revokes the
6		certified reinsurer's certification in accordance
7		with item (c) of subparagraph (9) of this
8		paragraph (C-5), the certified reinsurer's
9		certification shall remain in good standing in
10		Illinois for a period of 3 months, which shall be
11		extended if additional time is necessary to
12		consider the assuming insurer's application for
13		certification in Illinois.
14		(5) The Director shall assign a rating to each
15		certified reinsurer pursuant to rules adopted by the
16		Department. Factors that shall be considered as part
17		of the evaluation process include the following:
18		(a) The certified reinsurer's financial
19		strength rating from an acceptable rating agency.
20		Financial strength ratings shall be classified
21		according to the following ratings categories:
22		(i) Ratings Category "Secure - 1"
23		corresponds to the highest level of rating
24		given by a rating agency, including, but not
25		limited to, A.M. Best Company rating A++;
26		Standard & Poor's rating AAA; Moody's

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1		Investors Service rating Aaa; and Fitch
2		Ratings rating AAA.
3		(ii) Ratings Category "Secure - 2"
4		corresponds to the second-highest level of
5		rating or group of ratings given by a rating
6		agency, including, but not limited to, A.M.
7		Best Company rating A+; Standard & Poor's
8		rating AA+, AA, or AA-; Moody's Investors
9		Service ratings Aa1, Aa2, or Aa3; and Fitch
10		Ratings ratings AA+, AA, or AA-.
11		(iii) Ratings Category "Secure - 3"
12		corresponds to the third-highest level of
13		rating or group of ratings given by a rating
14		agency, including, but not limited to, A.M.
15		Best Company rating A; Standard & Poor's
16		ratings A+ or A; Moody's Investors Service
17		ratings A1 or A2; and Fitch Ratings ratings A+
18		or A.
19		(iv) Ratings Category "Secure - 4"
20		corresponds to the fourth-highest level of
21		rating or group of ratings given by a rating
22		agency, including, but not limited to, A.M.
23		Best Company rating A-; Standard & Poor's
24		rating A-; Moody's Investors Service rating
25		A3; and Fitch Ratings rating A-.
26		(v) Ratings Category "Secure - 5"

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1		corresponds to the fifth-highest level of
2		rating or group of ratings given by a rating
3		agency, including, but not limited to, A.M.
4		Best Company ratings B++ or B+; Standard &
5		Poor's ratings BBB+, BBB, or BBB-; Moody's
6		Investors Service ratings Baa1, Baa2, or Baa3;
7		and Fitch Ratings ratings BBB+, BBB, or BBB-.
8		(vi) Ratings Category "Vulnerable - 6"
9		corresponds to a level of rating given by a
10		rating agency, other than those described in
11		subitems (i) through (v) of this item (a),
12		including, but not limited to, A.M. Best
13		Company rating B, B-, C++, C+, C, C-, D, E, or
14		F; Standard & Poor's ratings BB+, BB, BB-, B+,
15		B, B-, CCC, CC, C, D, or R; Moody's Investors
16		Service ratings Ba1, Ba2, Ba3, B1, B2, B3,
17		Caa, Ca, or C; and Fitch Ratings ratings BB+,
18		BB, BB-, B+, B, B-, CCC+, CCC, CCC-, or D.
19		A failure to obtain or maintain at least 2
20		financial strength ratings from acceptable rating
21		agencies shall result in loss of eligibility for
22		certification.
23		(b) The business practices of the certified
24		reinsurer in dealing with its ceding insurers,
25		including its record of compliance with
26		reinsurance contractual terms and obligations.

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1		(c) For certified reinsurers domiciled in the
2		U.S., a review of the most recent applicable NAIC
3		Annual Statement Blank, either Schedule F (for
4		property and casualty reinsurers) or Schedule S
5		(for life and health reinsurers).
6		(d) For certified reinsurers not domiciled in
7		the U.S., a review annually of Form CR-F (for
8		property and casualty reinsurers) or Form CR-S
9		(for life and health reinsurers).
10		(e) The reputation of the certified reinsurer
11		for prompt payment of claims under reinsurance
12		agreements, based on an analysis of ceding
13		insurers' Schedule F reporting of overdue
14		reinsurance recoverables, including the proportion
15		of obligations that are more than 90 days past due
16		or are in dispute, with specific attention given
17		to obligations payable to companies that are in
18		administrative supervision or receivership.
19		(f) Regulatory actions against the certified
20		reinsurer.
21		(g) The report of the independent auditor on
22		the financial statements of the insurance
23		enterprise, on the basis described in item (h) of
24		this subparagraph (5).
25		(h) For certified reinsurers not domiciled in
26		the U.S., audited financial statements (audited

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1		Generally Accepted Accounting Principles (U.S.
2		GAAP) basis statement if available, audited
3		International Financial Reporting Standards (IFRS)
4		basis statements are allowed but must include an
5		audited footnote reconciling equity and net income
6		to U.S. GAAP basis or, with the permission of the
7		Director, audited IFRS basis statements with
8		reconciliation to U.S. GAAP basis certified by an
9		officer of the company), regulatory filings, and
10		actuarial opinion (as filed with the non-U.S.
11		jurisdiction supervisor). Upon the initial
12		application for certification, the Director shall
13		consider the audited financial statements filed
14		with its non-U.S. jurisdiction supervisor for the
15		3 years immediately preceding the date of the
16		initial application for certification.
17		(i) The liquidation priority of obligations to
18		a ceding insurer in the certified reinsurer's
19		domiciliary jurisdiction in the context of an
20		insolvency proceeding.
21		(j) A certified reinsurer's participation in
22		any solvent scheme of arrangement, or similar
23		procedure, that involves U.S. ceding insurers. The
24		Director shall receive prior notice from a
25		certified reinsurer that proposes participation by
26		the certified reinsurer in a solvent scheme of

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1		arrangement.
2		The maximum rating that a certified reinsurer may
3		be assigned shall correspond to its financial strength
4		rating, which shall be determined according to
5		subitems (i) through (vi) of item (a) of this
6		subparagraph (5). The Director shall use the lowest
7		financial strength rating received from an acceptable
8		rating agency in establishing the maximum rating of a
9		certified reinsurer.
10		(6) Based on the analysis conducted under item (e)
11		of subparagraph (5) of this paragraph (C-5) of a
12		certified reinsurer's reputation for prompt payment of
13		claims, the Director may make appropriate adjustments
14		in the security the certified reinsurer is required to
15		post to protect its liabilities to U.S. ceding
16		insurers, provided that the Director shall, at a
17		minimum, increase the security the certified reinsurer
18		is required to post by one rating level under item (a)
19		of subparagraph (8) of this paragraph (C-5) if the
20		Director finds that:
21		(a) more than 15% of the certified reinsurer's
22		ceding insurance clients have overdue reinsurance
23		recoverables on paid losses of 90 days or more
24		that are not in dispute and that exceed $100,000
25		for each cedent; or
26		(b) the aggregate amount of reinsurance

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1		recoverables on paid losses that are not in
2		dispute that are overdue by 90 days or more
3		exceeds $50,000,000.
4		(7) The Director shall post notice on the
5		Department's website promptly upon receipt of any
6		application for certification, including instructions
7		on how members of the public may respond to the
8		application. The Director may not take final action on
9		the application until at least 30 days after posting
10		the notice required by this subparagraph. The Director
11		shall publish a list of all certified reinsurers and
12		their ratings.
13		(8) A certified reinsurer shall secure obligations
14		assumed from U.S. ceding insurers under this
15		subsection (1) at a level consistent with its rating.
16		(a) The amount of security required in order
17		for full credit to be allowed shall correspond
18		with the applicable ratings category:
19		Secure - 1: 0%.
20		Secure - 2: 10%.
21		Secure - 3: 20%.
22		Secure - 4: 50%.
23		Secure - 5: 75%.
24		Vulnerable - 6: 100%.
25		(b) Nothing in this subparagraph (8) shall
26		prohibit the parties to a reinsurance agreement

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1		from agreeing to provisions establishing security
2		requirements that exceed the minimum security
3		requirements established for certified reinsurers
4		under this Section.
5		(c) In order for a domestic ceding insurer to
6		qualify for full financial statement credit for
7		reinsurance ceded to a certified reinsurer, the
8		certified reinsurer shall maintain security in a
9		form acceptable to the Director and consistent
10		with the provisions of subsection (2) of this
11		Section, or in a multibeneficiary trust in
12		accordance with paragraph (C) of this subsection
13		(1), except as otherwise provided in this
14		subparagraph (8).
15		(d) If a certified reinsurer maintains a trust
16		to fully secure its obligations subject to
17		paragraph (C) of this subsection (1), and chooses
18		to secure its obligations incurred as a certified
19		reinsurer in the form of a multibeneficiary trust,
20		then the certified reinsurer shall maintain
21		separate trust accounts for its obligations
22		incurred under reinsurance agreements issued or
23		renewed as a certified reinsurer with reduced
24		security as permitted by this subsection or
25		comparable laws of other U.S. jurisdictions and
26		for its obligations subject to paragraph (C) of

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1		this subsection (1). It shall be a condition to
2		the grant of certification under this paragraph
3		(C-5) that the certified reinsurer shall have
4		bound itself, by the language of the trust and
5		agreement with the Director with principal
6		regulatory oversight of each such trust account,
7		to fund, upon termination of any such trust
8		account, out of the remaining surplus of such
9		trust any deficiency of any other such trust
10		account. The certified reinsurer shall also
11		provide or make available, if requested by a
12		beneficiary under a trust, all the information
13		that is required to be provided under the
14		requirements of item (d) of subparagraph (2) of
15		paragraph (C) of this subsection (1) to the
16		certified reinsurer's U.S. ceding insurers or
17		their assigns and successors in interest. The
18		assuming insurer may decline to release trade
19		secrets or commercially sensitive information that
20		would qualify as exempt from disclosure under the
21		Freedom of Information Act.
22		(e) The minimum trusteed surplus requirements
23		provided in paragraph (C) of this subsection (1)
24		are not applicable with respect to a
25		multibeneficiary trust maintained by a certified
26		reinsurer for the purpose of securing obligations

SB3865 Engrossed - 346 - LRB102 24242 RJF 33473 b
1		incurred under this subsection, except that such
2		trust shall maintain a minimum trusteed surplus of
3		$10,000,000.
4		(f) With respect to obligations incurred by a
5		certified reinsurer under this subsection (1), if
6		the security is insufficient, then the Director
7		may reduce the allowable credit by an amount
8		proportionate to the deficiency and may impose
9		further reductions in allowable credit upon
10		finding that there is a material risk that the
11		certified reinsurer's obligations will not be paid
12		in full when due.
13		(9)(a) In the case of a downgrade by a rating
14		agency or other disqualifying circumstance, the
15		Director shall by written notice assign a new rating
16		to the certified reinsurer in accordance with the
17		requirements of subparagraph (5) of this paragraph
18		(C-5).
19		(b) If the rating of a certified reinsurer is
20		upgraded by the Director, then the certified reinsurer
21		may meet the security requirements applicable to its
22		new rating on a prospective basis, but the Director
23		shall require the certified reinsurer to post security
24		under the previously applicable security requirements
25		as to all contracts in force on or before the effective
26		date of the upgraded rating. If the rating of a

SB3865 Engrossed - 347 - LRB102 24242 RJF 33473 b
1		certified reinsurer is downgraded by the Director,
2		then the Director shall require the certified
3		reinsurer to meet the security requirements applicable
4		to its new rating for all business it has assumed as a
5		certified reinsurer.
6		(c) The Director may suspend, revoke, or otherwise
7		modify a certified reinsurer's certification at any
8		time if the certified reinsurer fails to meet its
9		obligations or security requirements under this
10		Section or if other financial or operating results of
11		the certified reinsurer, or documented significant
12		delays in payment by the certified reinsurer, lead the
13		Director to reconsider the certified reinsurer's
14		ability or willingness to meet its contractual
15		obligations. In seeking to suspend, revoke, or
16		otherwise modify a certified reinsurer's
17		certification, the Director shall follow the
18		procedures provided in paragraph (G) of this
19		subsection (1).
20		(d) For purposes of this subsection (1), a
21		certified reinsurer whose certification has been
22		terminated for any reason shall be treated as a
23		certified reinsurer required to secure 100% of its
24		obligations.
25		(i) As used in this item (d), the term
26		"terminated" refers to revocation, suspension,

SB3865 Engrossed - 348 - LRB102 24242 RJF 33473 b
1		voluntary surrender and inactive status.
2		(ii) If the Director continues to assign a
3		higher rating as permitted by other provisions of
4		this Section, then this requirement does not apply
5		to a certified reinsurer in inactive status or to
6		a reinsurer whose certification has been
7		suspended.
8		(e) Upon revocation of the certification of a
9		certified reinsurer by the Director, the assuming
10		insurer shall be required to post security in
11		accordance with subsection (2) of this Section in
12		order for the ceding insurer to continue to take
13		credit for reinsurance ceded to the assuming insurer.
14		If funds continue to be held in trust, then the
15		Director may allow additional credit equal to the
16		ceding insurer's pro rata share of the funds,
17		discounted to reflect the risk of uncollectibility and
18		anticipated expenses of trust administration.
19		(f) Notwithstanding the change of a certified
20		reinsurer's rating or revocation of its certification,
21		a domestic insurer that has ceded reinsurance to that
22		certified reinsurer may not be denied credit for
23		reinsurance for a period of 3 months for all
24		reinsurance ceded to that certified reinsurer, unless
25		the reinsurance is found by the Director to be at high
26		risk of uncollectibility.

SB3865 Engrossed - 349 - LRB102 24242 RJF 33473 b
1		(10) A certified reinsurer that ceases to assume
2		new business in this State may request to maintain its
3		certification in inactive status in order to continue
4		to qualify for a reduction in security for its
5		in-force business. An inactive certified reinsurer
6		shall continue to comply with all applicable
7		requirements of this subsection (1), and the Director
8		shall assign a rating that takes into account, if
9		relevant, the reasons why the reinsurer is not
10		assuming new business.
11		(11) Credit for reinsurance under this paragraph
12		(C-5) shall apply only to reinsurance contracts
13		entered into or renewed on or after the effective date
14		of the certification of the assuming insurer.
15		(12) The Director shall comply with all reporting
16		and notification requirements that may be established
17		by the NAIC with respect to certified reinsurers and
18		qualified jurisdictions.
19		(C-10)(1) Credit shall be allowed when the reinsurance
20		is ceded to an assuming insurer meeting each of the
21		conditions set forth in this subparagraph.
22		(a) The assuming insurer must have its head office
23		in or be domiciled in, as applicable, and be licensed
24		in a reciprocal jurisdiction. As used in this
25		paragraph (C-10), "reciprocal jurisdiction" means a
26		jurisdiction that meets one of the following:

SB3865 Engrossed - 350 - LRB102 24242 RJF 33473 b
1		(i) a non-U.S. jurisdiction that is subject to
2		an in-force covered agreement with the United
3		States, each within its legal authority, or, in
4		the case of a covered agreement between the United
5		States and European Union, is a member state of
6		the European Union; as used in this subitem,
7		"covered agreement" means an agreement entered
8		into pursuant to the Dodd-Frank Wall Street Reform
9		and Consumer Protection Act (31 U.S.C. 313 and
10		314) that is currently in effect or in a period of
11		provisional application and addresses the
12		elimination, under specified conditions, of
13		collateral requirements as a condition for
14		entering into any reinsurance agreement with a
15		ceding insurer domiciled in this State or for
16		allowing the ceding insurer to recognize credit
17		for reinsurance;
18		(ii) a U.S. jurisdiction that meets the
19		requirements for accreditation under the NAIC
20		financial standards and accreditation program; or
21		(iii) a qualified jurisdiction, as determined
22		by the Director pursuant to subparagraph (3) of
23		paragraph (C-5) of subsection (1) of this Section,
24		that is not otherwise described in subitem (i) or
25		(ii) of this item and that meets certain
26		additional requirements, consistent with the terms

SB3865 Engrossed - 351 - LRB102 24242 RJF 33473 b
1		and conditions of in-force covered agreements, as
2		specified by the Department by rule.
3		(b) The assuming insurer must have and maintain,
4		on an ongoing basis, minimum capital and surplus, or
5		its equivalent, calculated according to the
6		methodology of its domiciliary jurisdiction, in an
7		amount to be set forth by rule. If the assuming insurer
8		is an association, including incorporated and
9		individual unincorporated underwriters, it must have
10		and maintain, on an ongoing basis, minimum capital and
11		surplus equivalents (net of liabilities) calculated
12		according to the methodology applicable in its
13		domiciliary jurisdiction and a central fund containing
14		a balance in amounts to be set forth by rule.
15		(c) The assuming insurer must have and maintain,
16		on an ongoing basis, a minimum solvency or capital
17		ratio, as applicable, that will be set forth by rule.
18		If the assuming insurer is an association, including
19		incorporated and individual unincorporated
20		underwriters, it must have and maintain, on an ongoing
21		basis, a minimum solvency or capital ratio in the
22		reciprocal jurisdiction where the assuming insurer has
23		its head office or is domiciled, as applicable, and is
24		also licensed.
25		(d) The assuming insurer must provide adequate
26		assurance to the Director, in a form specified by the

SB3865 Engrossed - 352 - LRB102 24242 RJF 33473 b
1		Department by rule, as follows:
2		(i) the assuming insurer must provide prompt
3		written notice and explanation to the Director if
4		it falls below the minimum requirements set forth
5		in items (b) or (c) of this subparagraph or if any
6		regulatory action is taken against it for serious
7		noncompliance with applicable law;
8		(ii) the assuming insurer must consent in
9		writing to the jurisdiction of the courts of this
10		State and to the appointment of the Director as
11		agent for service of process; the Director may
12		require that consent for service of process be
13		provided to the Director and included in each
14		reinsurance agreement; nothing in this subitem
15		(ii) shall limit or in any way alter the capacity
16		of parties to a reinsurance agreement to agree to
17		alternative dispute resolution mechanisms, except
18		to the extent such agreements are unenforceable
19		under applicable insolvency or delinquency laws;
20		(iii) the assuming insurer must consent in
21		writing to pay all final judgments obtained by a
22		ceding insurer or its legal successor, whenever
23		enforcement is sought, that have been declared
24		enforceable in the jurisdiction where the judgment
25		was obtained;
26		(iv) each reinsurance agreement must include a

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1		provision requiring the assuming insurer to
2		provide security in an amount equal to 100% of the
3		assuming insurer's liabilities attributable to
4		reinsurance ceded pursuant to that agreement if
5		the assuming insurer resists enforcement of a
6		final judgment that is enforceable under the law
7		of the jurisdiction in which it was obtained or a
8		properly enforceable arbitration award, whether
9		obtained by the ceding insurer or by its legal
10		successor on behalf of its resolution estate; and
11		(v) the assuming insurer must confirm that it
12		is not presently participating in any solvent
13		scheme of arrangement which involves this State's
14		ceding insurers and agree to notify the ceding
15		insurer and the Director and to provide security
16		in an amount equal to 100% of the assuming
17		insurer's liabilities to the ceding insurer if the
18		assuming insurer enters into such a solvent scheme
19		of arrangement; the security shall be in a form
20		consistent with the provisions of paragraph (C-5)
21		of subsection (1) and subsection (2) and as
22		specified by the Department by rule.
23		(e) If requested by the Director, the assuming
24		insurer or its legal successor must provide, on behalf
25		of itself and any legal predecessors, certain
26		documentation to the Director, as specified by the

SB3865 Engrossed - 354 - LRB102 24242 RJF 33473 b
1		Department by rule.
2		(f) The assuming insurer must maintain a practice
3		of prompt payment of claims under reinsurance
4		agreements pursuant to criteria set forth by rule.
5		(g) The assuming insurer's supervisory authority
6		must confirm to the Director on an annual basis, as of
7		the preceding December 31 or at the annual date
8		otherwise statutorily reported to the reciprocal
9		jurisdiction, that the assuming insurer complied with
10		the requirements set forth in items (b) and (c) of this
11		subparagraph.
12		(h) Nothing in this subparagraph precludes an
13		assuming insurer from providing the Director with
14		information on a voluntary basis.
15		(2) The Director shall timely create and publish a
16		list of reciprocal jurisdictions.
17		(a) The Director's list shall include any
18		reciprocal jurisdiction as defined under subitems (i)
19		and (ii) of item (a) of subparagraph (1) of this
20		paragraph, and shall consider any other reciprocal
21		jurisdiction included on the list of reciprocal
22		jurisdictions published through the NAIC committee
23		process. The Director may approve a jurisdiction that
24		does not appear on the NAIC list of reciprocal
25		jurisdictions in accordance with criteria to be
26		developed by rules adopted by the Department.

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1		(b) The Director may remove a jurisdiction from
2		the list of reciprocal jurisdictions upon a
3		determination that the jurisdiction no longer meets
4		the requirements of a reciprocal jurisdiction in
5		accordance with a process set forth in rules adopted
6		by the Department, except that the Director shall not
7		remove from the list a reciprocal jurisdiction as
8		defined under subitems (i) and (ii) of item (a) of
9		subparagraph (1) of this paragraph. If otherwise
10		allowed pursuant to this Section, credit for
11		reinsurance ceded to an assuming insurer that has its
12		home office or is domiciled in that jurisdiction shall
13		be allowed upon removal of a reciprocal jurisdiction
14		from this list.
15		(3) The Director shall timely create and publish a
16		list of assuming insurers that have satisfied the
17		conditions set forth in this paragraph and to which
18		cessions shall be granted credit in accordance with this
19		paragraph. The Director may add an assuming insurer to the
20		list if a NAIC-accredited jurisdiction has added the
21		assuming insurer to a list of assuming insurers or if,
22		upon initial eligibility, the assuming insurer submits the
23		information to the Director as required under item (d) of
24		subparagraph (1) of this paragraph and complies with any
25		additional requirements that the Department may impose by
26		rule except to the extent that they conflict with an

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1		applicable covered agreement.
2		(4) If the Director determines that an assuming
3		insurer no longer meets one or more of the requirements
4		under this paragraph, the Director may revoke or suspend
5		the eligibility of the assuming insurer for recognition
6		under this paragraph in accordance with procedures set
7		forth by rule.
8		(a) While an assuming insurer's eligibility is
9		suspended, no reinsurance agreement issued, amended,
10		or renewed after the effective date of the suspension
11		qualifies for credit except to the extent that the
12		assuming insurer's obligations under the contract are
13		secured in accordance with subsection (2).
14		(b) If an assuming insurer's eligibility is
15		revoked, no credit for reinsurance may be granted
16		after the effective date of the revocation with
17		respect to any reinsurance agreements entered into by
18		the assuming insurer, including reinsurance agreements
19		entered into before the date of revocation, except to
20		the extent that the assuming insurer's obligations
21		under the contract are secured in a form acceptable to
22		the Director and consistent with the provisions of
23		subsection (2).
24		(5) If subject to a legal process of rehabilitation,
25		liquidation, or conservation, as applicable, the ceding
26		insurer or its representative may seek and, if determined

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1		appropriate by the court in which the proceedings are
2		pending, may obtain an order requiring that the assuming
3		insurer post security for all outstanding ceded
4		liabilities.
5		(6) Nothing in this paragraph shall limit or in any
6		way alter the capacity of parties to a reinsurance
7		agreement to agree on requirements for security or other
8		terms in that reinsurance agreement except as expressly
9		prohibited by this Section or other applicable law or
10		regulation.
11		(7) Credit may be taken under this paragraph only for
12		reinsurance agreements entered into, amended, or renewed
13		on or after the effective date of this amendatory Act of
14		the 102nd General Assembly and only with respect to losses
15		incurred and reserves reported on or after the later of:
16		(i) the date on which the assuming insurer has met
17		all eligibility requirements pursuant to subparagraph
18		(1) of this paragraph; and
19		(ii) the effective date of the new reinsurance
20		agreement, amendment, or renewal.
21		This subparagraph does not alter or impair a ceding
22		insurer's right to take credit for reinsurance, to the
23		extent that credit is not available under this paragraph,
24		as long as the reinsurance qualifies for credit under any
25		other applicable provision of this Section.
26		(8) Nothing in this paragraph shall authorize an

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1		assuming insurer to withdraw or reduce the security
2		provided under any reinsurance agreement except as
3		permitted by the terms of the agreement.
4		(9) Nothing in this paragraph shall limit or in any
5		way alter the capacity of parties to any reinsurance
6		agreement to renegotiate the agreement.
7		(D) Credit shall be allowed when the reinsurance is
8		ceded to an assuming insurer not meeting the requirements
9		of paragraph (A), (B), (B-5), (C), (C-5), or (C-10) of
10		this subsection (1) but only with respect to the insurance
11		of risks located in jurisdictions where that reinsurance
12		is required by applicable law or regulation of that
13		jurisdiction.
14		(E) If the assuming insurer is not licensed to
15		transact insurance in this State or an accredited or
16		certified reinsurer in this State, the credit permitted by
17		paragraphs (B-5) and (C) of this subsection (1) shall not
18		be allowed unless the assuming insurer agrees in the
19		reinsurance agreements:
20		(1) that in the event of the failure of the
21		assuming insurer to perform its obligations under the
22		terms of the reinsurance agreement, the assuming
23		insurer, at the request of the ceding insurer, shall
24		submit to the jurisdiction of any court of competent
25		jurisdiction in any state of the United States, will
26		comply with all requirements necessary to give the

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1		court jurisdiction, and will abide by the final
2		decision of the court or of any appellate court in the
3		event of an appeal; and
4		(2) to designate the Director or a designated
5		attorney as its true and lawful attorney upon whom may
6		be served any lawful process in any action, suit, or
7		proceeding instituted by or on behalf of the ceding
8		company.
9		This provision is not intended to conflict with or
10		override the obligation of the parties to a reinsurance
11		agreement to arbitrate their disputes, if an obligation to
12		arbitrate is created in the agreement.
13		(F) If the assuming insurer does not meet the
14		requirements of paragraph (A), (B), (B-5), or (C-10) of
15		this subsection (1), the credit permitted by paragraph (C)
16		or (C-5) of this subsection (1) shall not be allowed
17		unless the assuming insurer agrees in the trust agreements
18		to the following conditions:
19		(1) Notwithstanding any other provisions in the
20		trust instrument, if the trust fund is inadequate
21		because it contains an amount less than the amount
22		required by subparagraph (3) of paragraph (C) of this
23		subsection (1) or if the grantor of the trust has been
24		declared insolvent or placed into receivership,
25		rehabilitation, liquidation, or similar proceedings
26		under the laws of its state or country of domicile, the

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1		trustee shall comply with an order of the state
2		official with regulatory oversight over the trust or
3		with an order of a court of competent jurisdiction
4		directing the trustee to transfer to the state
5		official with regulatory oversight all of the assets
6		of the trust fund.
7		(2) The assets shall be distributed by and claims
8		shall be filed with and valued by the state official
9		with regulatory oversight in accordance with the laws
10		of the state in which the trust is domiciled that are
11		applicable to the liquidation of domestic insurance
12		companies.
13		(3) If the state official with regulatory
14		oversight determines that the assets of the trust fund
15		or any part thereof are not necessary to satisfy the
16		claims of the U.S. ceding insurers of the grantor of
17		the trust, the assets or part thereof shall be
18		returned by the state official with regulatory
19		oversight to the trustee for distribution in
20		accordance with the trust agreement.
21		(4) The grantor shall waive any rights otherwise
22		available to it under U.S. law that are inconsistent
23		with the provision.
24		(G) If an accredited or certified reinsurer ceases to
25		meet the requirements for accreditation or certification,
26		then the Director may suspend or revoke the reinsurer's

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1		accreditation or certification.
2		(1) The Director must give the reinsurer notice
3		and opportunity for hearing. The suspension or
4		revocation may not take effect until after the
5		Director's order on hearing, unless:
6		(a) the reinsurer waives its right to hearing;
7		(b) the Director's order is based on
8		regulatory action by the reinsurer's domiciliary
9		jurisdiction or the voluntary surrender or
10		termination of the reinsurer's eligibility to
11		transact insurance or reinsurance business in its
12		domiciliary jurisdiction or in the primary
13		certifying state of the reinsurer under
14		subparagraph (4) of paragraph (C-5) of this
15		subsection (1); or
16		(c) the Director finds that an emergency
17		requires immediate action and a court of competent
18		jurisdiction has not stayed the Director's action.
19		(2) While a reinsurer's accreditation or
20		certification is suspended, no reinsurance contract
21		issued or renewed after the effective date of the
22		suspension qualifies for credit except to the extent
23		that the reinsurer's obligations under the contract
24		are secured in accordance with subsection (2) of this
25		Section. If a reinsurer's accreditation or
26		certification is revoked, no credit for reinsurance

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1		may be granted after the effective date of the
2		revocation, except to the extent that the reinsurer's
3		obligations under the contract are secured in
4		accordance with subsection (2) of this Section.
5		(H) The following provisions shall apply concerning
6		concentration of risk:
7		(1) A ceding insurer shall take steps to manage
8		its reinsurance recoverable proportionate to its own
9		book of business. A domestic ceding insurer shall
10		notify the Director within 30 days after reinsurance
11		recoverables from any single assuming insurer, or
12		group of affiliated assuming insurers, exceeds 50% of
13		the domestic ceding insurer's last reported surplus to
14		policyholders, or after it is determined that
15		reinsurance recoverables from any single assuming
16		insurer, or group of affiliated assuming insurers, is
17		likely to exceed this limit. The notification shall
18		demonstrate that the exposure is safely managed by the
19		domestic ceding insurer.
20		(2) A ceding insurer shall take steps to diversify
21		its reinsurance program. A domestic ceding insurer
22		shall notify the Director within 30 days after ceding
23		to any single assuming insurer, or group of affiliated
24		assuming insurers, more than 20% of the ceding
25		insurer's gross written premium in the prior calendar
26		year, or after it has determined that the reinsurance

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1		ceded to any single assuming insurer, or group of
2		affiliated assuming insurers, is likely to exceed this
3		limit. The notification shall demonstrate that the
4		exposure is safely managed by the domestic ceding
5		insurer.
6		(2) Credit for the reinsurance ceded by a domestic insurer
7		to an assuming insurer not meeting the requirements of
8		subsection (1) of this Section shall be allowed in an amount
9		not exceeding the assets or liabilities carried by the ceding
10		insurer. The credit shall not exceed the amount of funds held
11		by or held in trust for the ceding insurer under a reinsurance
12		contract with the assuming insurer as security for the payment
13		of obligations thereunder, if the security is held in the
14		United States subject to withdrawal solely by, and under the
15		exclusive control of, the ceding insurer; or, in the case of a
16		trust, held in a qualified United States financial
17		institution, as defined in paragraph (B) of subsection (3) of
18		this Section. This security may be in the form of:
19		(A) Cash.
20		(B) Securities listed by the Securities Valuation
21		Office of the National Association of Insurance
22		Commissioners, including those deemed exempt from filing
23		as defined by the Purposes and Procedures Manual of the
24		Securities Valuation Office that conform to the
25		requirements of Article VIII of this Code that are not
26		issued by an affiliate of either the assuming or ceding

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1		company.
2		(C) Clean, irrevocable, unconditional, letters of
3		credit issued or confirmed by a qualified United States
4		financial institution, as defined in paragraph (A) of
5		subsection (3) of this Section. The letters of credit
6		shall be effective no later than December 31 of the year
7		for which filing is being made, and in the possession of,
8		or in trust for, the ceding company on or before the filing
9		date of its annual statement. Letters of credit meeting
10		applicable standards of issuer acceptability as of the
11		dates of their issuance (or confirmation) shall,
12		notwithstanding the issuing (or confirming) institution's
13		subsequent failure to meet applicable standards of issuer
14		acceptability, continue to be acceptable as security until
15		their expiration, extension, renewal, modification, or
16		amendment, whichever first occurs.
17		(D) Any other form of security acceptable to the
18		Director.
19		(3)(A) For purposes of paragraph (C) of subsection (2) of
20		this Section, a "qualified United States financial
21		institution" means an institution that:
22		(1) is organized or, in the case of a U.S. office of a
23		foreign banking organization, licensed under the laws of
24		the United States or any state thereof;
25		(2) is regulated, supervised, and examined by U.S.
26		federal or state authorities having regulatory authority

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1		over banks and trust companies;
2		(3) has been designated by either the Director or the
3		Securities Valuation Office of the National Association of
4		Insurance Commissioners as meeting such standards of
5		financial condition and standing as are considered
6		necessary and appropriate to regulate the quality of
7		financial institutions whose letters of credit will be
8		acceptable to the Director; and
9		(4) is not affiliated with the assuming company.
10		(B) A "qualified United States financial institution"
11		means, for purposes of those provisions of this law specifying
12		those institutions that are eligible to act as a fiduciary of a
13		trust, an institution that:
14		(1) is organized or, in the case of the U.S. branch or
15		agency office of a foreign banking organization, licensed
16		under the laws of the United States or any state thereof
17		and has been granted authority to operate with fiduciary
18		powers;
19		(2) is regulated, supervised, and examined by federal
20		or state authorities having regulatory authority over
21		banks and trust companies; and
22		(3) is not affiliated with the assuming company,
23		however, if the subject of the reinsurance contract is
24		insurance written pursuant to Section 155.51 of this Code,
25		the financial institution may be affiliated with the
26		assuming company with the prior approval of the Director.

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1		(C) Except as set forth in subparagraph (11) of paragraph
2		(C-5) of subsection (1) of this Section as to cessions by
3		certified reinsurers, this amendatory Act of the 100th General
4		Assembly shall apply to all cessions after the effective date
5		of this amendatory Act of the 100th General Assembly under
6		reinsurance agreements that have an inception, anniversary, or
7		renewal date not less than 6 months after the effective date of
8		this amendatory Act of the 100th General Assembly.
9		(D) The Department shall adopt rules implementing the
10		provisions of this Article.
11		(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A.
12		102-672 for effective date of P.A. 102-578).)
13		(215 ILCS 5/179A-5)
14		Sec. 179A-5. Purpose. This Article is adopted to provide a
15		basis for the creation of protected cells by a domestic
16		insurer as one means of accessing alternative sources of
17		capital and achieving the benefits of insurance
18		securitization. Investors in fully funded insurance
19		securitization transactions provide funds that are available
20		to pay the insurer's insurance obligations or to repay the
21		investors or both. The creation of protected cells is intended
22		to be a means to achieve more efficiencies in conducting
23		insurance securitizations.
24		Under the terms of the typical debt instrument underlying
25		an insurance securitization transaction, prepaid principal is

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1		repaid to the investor on a specified maturity date with
2		interest, unless a trigger event occurs. The insurance
3		securitization proceeds secure both the protected cell
4		company's insurance obligations if a trigger event occurs, as
5		well as the protected cell company's obligation to repay the
6		insurance securitization investors if a trigger event does not
7		occur. Insurance securitization transactions have been
8		performed through non-domestic alien companies in order to
9		utilize efficiencies available to non-domestic alien companies
10		that are not currently available to domestic companies. This
11		Article is adopted in order to create more efficiency in
12		conducting insurance securitization, to allow domestic
13		companies easier access to alternative sources of capital, and
14		to promote the benefits of insurance securitization generally.
15		(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)
16		(215 ILCS 5/179E-5)
17		Sec. 179E-5. Purpose. This Article is adopted to provide
18		for the creation of Special Purpose Reinsurance Vehicles
19		("SPRV") exclusively to facilitate the securitization of one
20		or more ceding insurers' risk as a means of accessing
21		alternative sources of capital and achieving the benefits of
22		securitization. Investors in fully funded insurance
23		securitization transactions provide funds that are available
24		to the SPRV to secure the aggregate limit under an SPRV
25		contract that provides coverage against the occurrence of a

SB3865 Engrossed - 368 - LRB102 24242 RJF 33473 b
1		triggering event. The creation of SPRVs is intended to achieve
2		greater efficiencies in conducting insurance securitizations,
3		to diversify and broaden insurers' access to sources of risk
4		bearing capital, and to make insurance securitization
5		generally available on reasonable terms to as many U.S.
6		insurers as possible.
7		Under the terms of the typical securities underlying an
8		insurance securitization transaction, proceeds from the
9		issuance of securities are repaid to the investor on a
10		specified maturity date with interest or dividends unless a
11		triggering event occurs. The insurance securitization proceeds
12		are available to pay the SPRV's obligations to the ceding
13		insurer if the triggering event occurs, as well as being
14		available to satisfy the SPRV's obligation to repay the
15		insurance securitization investors if a triggering event does
16		not occur. Insurance securitization transactions have been
17		performed by non-domestic alien companies to utilize
18		efficiencies available to those non-domestic alien companies
19		that are not currently available to domestic companies. This
20		Article is adopted to allow more efficiency in conducting
21		insurance securitizations, to allow ceding insurers easier
22		access to alternative sources of risk bearing capital, and to
23		promote the benefits of insurance securitization to U.S.
24		insurers.
25		(Source: P.A. 92-124, eff. 7-20-01.)

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1		(215 ILCS 5/Art. XII heading)
2		ARTICLE XII. DOMESTICATION OF
3		FOREIGN AND NON-DOMESTIC ALIEN COMPANIES
4		(215 ILCS 5/180) (from Ch. 73, par. 792)
5		Sec. 180. Companies that may domesticate.
6		(1) Any domestic, foreign, or non-domestic alien stock
7		company, mutual company, assessment legal reserve company,
8		reciprocal, or fraternal benefit society, authorized or which
9		may be authorized to do business in this State, may reorganize
10		under the laws of this State (including a reorganization as a
11		captive insurance company under the laws of this State), by
12		complying with the provisions of this Article.
13		(2) As used in this Article: "reorganize" means
14		reorganize, reincorporate, or domesticate as an Illinois
15		insurer; "reorganization" means reorganization,
16		reincorporation, or domestication as an Illinois insurer;
17		"reorganized company" means any company that has availed
18		itself of the provisions of this Article, and the
19		reorganization of which has been effected as in this Article
20		provided; and "similar domestic company" means, in the case of
21		an application for reorganization as a domestic captive
22		insurance company, a domestic captive insurance company
23		organized under Article VIIC.
24		(Source: P.A. 87-1216.)

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1		(215 ILCS 5/185.1) (from Ch. 73, par. 797.1)
2		Sec. 185.1. Effect of Reorganization.
3		When the reorganization has been effected:
4		(a) The articles of reorganization shall be the articles
5		of incorporation of the reorganized company and said company
6		shall continue in existence as, and thereafter be, a company
7		of this State.
8		(b) The reorganized company shall make its reports in
9		accordance with the laws of this State and shall be subject to
10		the exclusive regulation and supervision by the Department of
11		Insurance of this State and shall be subject to regulation and
12		supervision by the Insurance Departments of other states and
13		countries as a foreign or non-domestic alien company.
14		(c) The reorganized company shall have all of the rights,
15		privileges, immunities and powers and shall be subject to all
16		of the duties and liabilities granted or imposed by this Code
17		(except in the case of a domestic captive insurance company,
18		which shall have all of the rights, privileges, immunities and
19		powers and shall be subject to all of the duties and
20		liabilities granted or imposed by Article VIIC of this Code).
21		(d) The reorganized company shall thereupon and thereafter
22		possess all the rights, privileges, immunities, powers and
23		franchises of a public as well as a private nature,
24		theretofore possessed by the company so reorganized. Without
25		limiting the generality of the foregoing, (i) the agency
26		appointments, licenses, certificates of authority and rates

SB3865 Engrossed - 371 - LRB102 24242 RJF 33473 b
1		which are in existence at the time of the reorganization of
2		such reorganized company takes effect shall continue in full
3		force and effect; (ii) all property, real, personal and mixed,
4		and all debts due on whatever account, including subscriptions
5		to shares, assessments payable from members or policyholders,
6		and all other choses in action, and all and every other
7		interest of, or belonging to or due to the company so
8		reorganized, shall be deemed to be transferred to and vested
9		in the reorganized company without further act or deed; and
10		(iii) the title to any real estate or any interest therein
11		theretofore vested in the company so reorganized, shall not
12		revert or be in any way impaired by reason of such
13		reorganization.
14		(e) The reorganized company shall thenceforth be
15		responsible and liable for all the liabilities and obligations
16		of the company so reorganized. Any claim existing, or action
17		or proceeding pending by or against the company so
18		reorganized, may be prosecuted to judgment as if such
19		reorganization had not taken place, or such reorganized
20		company may be substituted in its place. Neither the rights of
21		creditors nor any liens upon the property of the company so
22		reorganized, shall be impaired by such reorganization, but
23		such liens shall be limited to the property upon which they
24		were liens immediately prior to the reorganization, unless
25		otherwise provided in the articles of reorganization.
26		(Source: P.A. 85-131.)

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1		(215 ILCS 5/188) (from Ch. 73, par. 800)
2		Sec. 188. Grounds for rehabilitation and liquidation of a
3		domestic company or an unauthorized foreign or non-domestic
4		alien company. Whenever any domestic company or any
5		unauthorized foreign or non-domestic alien company:
6		1. is insolvent;
7		2. has failed or refused to submit its books, papers,
8		accounts, records or affairs to the reasonable inspection
9		or examination of the Director or his actuaries,
10		supervisors, deputies, or examiners;
11		3. has concealed, removed, altered, destroyed or
12		failed to establish and maintain books, records,
13		documents, accounts, vouchers and other pertinent material
14		adequate for the determination of its financial condition
15		by examination under Sections 132 through 132.7 or has
16		failed to properly administer claims and to maintain
17		claims records which are adequate for the determination of
18		its outstanding claims liability;
19		4. has failed or refused to observe an order of the
20		Director to make good within the time prescribed by law
21		any deficiency, whenever its capital and minimum required
22		surplus, if a stock company, or its required surplus, if a
23		company other than stock, has become impaired;
24		5. has, by articles of consolidation, contract of
25		reinsurance or otherwise, transferred or attempted to

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1		transfer its entire property or business not in conformity
2		with this Code, or entered into any transaction the effect
3		of which is to merge substantially its entire property or
4		business in any other company without having first
5		obtained the written approval of the Director under this
6		Code;
7		6. is found to be in such condition that its further
8		transaction of business would be hazardous to its
9		policyholders, or to its creditors, or to the public;
10		7. has violated its charter or any law of this State or
11		has exceeded or is exceeding its corporate powers;
12		8. has an officer who has refused upon reasonable
13		demand to be examined under oath touching its affairs;
14		9. is found to be in such condition that it could not
15		meet the requirements for organization and authorization
16		as required by law, except as to the amount of the original
17		surplus required of a stock company in Section 13, and
18		except as to the amount of the surplus required of a mutual
19		company in excess of the minimum surplus required by this
20		Code to be maintained, or either an authorized control
21		level event or a mandatory control level event as set
22		forth in Article IIA exists;
23		10. has ceased for the period of one year to transact
24		insurance business;
25		11. has commenced, or has attempted to commence, any
26		voluntary liquidation or dissolution proceeding, or any

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1		proceeding to procure the appointment of a receiver,
2		liquidator, rehabilitator, sequestrator, or a similar
3		officer for itself;
4		12. is a party, whether plaintiff or defendant in any
5		proceeding in which an application is made for the
6		appointment of a receiver, custodian, liquidator,
7		rehabilitator, sequestrator, or similar officer for such
8		company or its property, or a receiver, custodian,
9		liquidator, rehabilitator, sequestrator or similar
10		officer, for such company or its property is appointed by
11		any court, or such appointment is imminent;
12		13. consents by a majority of its directors,
13		stockholders or members;
14		14. has not organized and obtained a certificate
15		authorizing it to commence the transaction of its business
16		within the period of time prescribed by the sections of
17		this Code under which it is or proposes to be organized; or
18		15. has failed or refused to pay any valid final
19		judgment within 30 days after the rendition thereof, or
20		whenever it appears to the Director that any person has
21		committed a violation of Article VIII 1/2 with the result
22		described in Section 131.26,
23		sufficient grounds shall be deemed to exist for the
24		commencement of rehabilitation or liquidation proceedings.
25		With respect to a domestic company, the Director must
26		report, and with respect to an unauthorized foreign or

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1		non-domestic alien company, the Director may report any such
2		case to the Attorney General of this State whose duty it shall
3		be to apply forthwith by complaint on relation of the Director
4		in the name of the People of the State of Illinois, as
5		plaintiff, to the Circuit Court of Cook County, the Circuit
6		Court of Sangamon County, or the circuit court of the county in
7		which such company has, or last had its principal office, for
8		an order to rehabilitate or liquidate the defendant company as
9		provided in this Article, and for such other relief as the
10		nature of the case and the interests of its policyholders,
11		creditors, members, stockholders or the public may require.
12		When, upon investigation, the Director finds that a
13		company is engaged in any aspect of the business of insurance
14		on behalf of or in association with any domestic insurance
15		company, against which a receivership proceeding has been or
16		is being filed under this Article, in a manner that appears to
17		be detrimental to policyholders, creditors, members,
18		shareholders, or the public, the Director may report such case
19		to the Attorney General of this State, whose duty it is to
20		apply forthwith by complaint on relation of the Director in
21		the name of the People of the State of Illinois, as plaintiff,
22		to the court in which the receivership proceeding is pending
23		for an order to appoint the Director as receiver to assume
24		control of the assets and operation of the company pending a
25		complete investigation and determination of the rights of the
26		policyholders, creditors, members, shareholders, and the

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1		general public.
2		(Source: P.A. 92-140, eff. 7-24-01.)
3		(215 ILCS 5/188.1) (from Ch. 73, par. 800.1)
4		Sec. 188.1. Provisions for conservation of assets of a
5		domestic, foreign, or non-domestic alien company.
6		(1) Upon the filing by the Director of a verified
7		complaint alleging (a) that with respect to a domestic,
8		foreign, or non-domestic alien company, whether authorized or
9		unauthorized, a condition exists that would justify a court
10		order for proceedings under Section 188, and (b) that the
11		interests of creditors, policyholders or the public will
12		probably be endangered by delay, then the circuit court of
13		Sangamon or Cook County or the circuit court of the county in
14		which such company has or last had its principal office shall
15		enter forthwith without a hearing or prior notice an order
16		directing the director to take possession and control of the
17		property, business, books, records, and accounts of the
18		company, and of the premises occupied by it for the
19		transaction of its business, or such part of each as the
20		complaint shall specify, and enjoining the company and its
21		officers, directors, agents, servants, and employees from
22		disposition of its property and from transaction of its
23		business except with the concurrence of the Director until the
24		further order of the court. Copies of the verified complaint
25		and the seizure order shall be served upon the company.

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1		(2) The order shall continue in force and effect for such
2		time as the court deems necessary for the Director to
3		ascertain the condition and situation of the company. On
4		motion of either party or on its own motion, the court may from
5		time to time hold such hearings as it deems desirable, and may
6		extend, shorten, or modify the terms of, the seizure order. So
7		far as the court deems it possible, the parties shall be given
8		adequate notice of such hearings. As soon as practicable, the
9		court shall vacate the seizure order or terminate the
10		conservation proceedings of the company, either when the
11		Director has failed to institute proceedings under Section 188
12		having a reasonable opportunity to do so, or upon an order of
13		the court pursuant to such proceedings.
14		(3) Entry of a seizure order under this section shall not
15		constitute an anticipatory breach of any contract of the
16		company.
17		(4) The court may hold all hearings in conservation
18		proceedings privately in chambers, and shall do so on request
19		of any officer of the company proceeded against.
20		(5) In conservation proceedings and judicial reviews
21		thereof, all records of the company, other documents, and all
22		insurance department files and court records and papers, so
23		far as they pertain to and are a part of the record of the
24		conservation proceedings, shall be and remain confidential
25		except as is necessary to obtain compliance therewith, unless
26		and until the court, after hearing arguments in chambers from

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1		the Director and the company, shall decide otherwise, or
2		unless the company requests that the matter be made public.
3		(6) Any person having possession of and refusing to
4		deliver any of the property, business, books, records or
5		accounts of a company against which a seizure order has been
6		issued shall be guilty of a Class A misdemeanor.
7		(Source: P.A. 89-206, eff. 7-21-95.)
8		(215 ILCS 5/197) (from Ch. 73, par. 809)
9		Sec. 197. Rights, powers, and duties ancillary to
10		domiciliary proceeding.
11		The rights, powers, and duties of the Director as
12		conservator, rehabilitator, or liquidator, with reference to
13		the assets of a foreign or non-domestic alien company, whether
14		authorized or unauthorized, shall be ancillary to the rights,
15		powers and duties imposed upon any receiver or other person,
16		if any, in charge of the property, business and affairs of such
17		company in its domiciliary state or country.
18		(Source: P.A. 86-1154; 86-1156.)
19		(215 ILCS 5/201) (from Ch. 73, par. 813)
20		Sec. 201. Who may apply for appointment of receiver or
21		liquidator.) No order or judgment enjoining, restraining or
22		interfering with the prosecution of the business of any
23		company, or for the appointment of a temporary or permanent
24		receiver, rehabilitator or liquidator of a domestic company,

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1		or receiver or conservator of a foreign or non-domestic alien
2		company, shall be made or granted otherwise than upon the
3		complaint of the Director represented by the Attorney General
4		as provided in this article, except in an action by a judgment
5		creditor or in proceedings supplementary thereto after notice
6		that a final judgment has been entered and that the judgment
7		creditor intends to file a complaint praying for any of the
8		relief in this section mentioned, has been served upon the
9		Director at least 30 days prior to the filing of such complaint
10		by such judgment creditor.
11		(Source: P.A. 84-546.)
12		(215 ILCS 5/223) (from Ch. 73, par. 835)
13		Sec. 223. Director to value policies - Legal standard of
14		valuation.
15		(1) For policies and contracts issued prior to the
16		operative date of the Valuation Manual, the Director shall
17		annually value, or cause to be valued, the reserve liabilities
18		(hereinafter called reserves) for all outstanding life
19		insurance policies and annuity and pure endowment contracts of
20		every life insurance company doing business in this State,
21		except that in the case of a non-domestic an alien company,
22		such valuation shall be limited to its United States business.
23		In calculating such reserves, he may use group methods and
24		approximate averages for fractions of a year or otherwise. In
25		lieu of the valuation of the reserves herein required of any

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1		foreign or non-domestic alien company, he may accept any
2		valuation made, or caused to be made, by the insurance
3		supervisory official of any state or other jurisdiction when
4		such valuation complies with the minimum standard provided in
5		this Section.
6		The provisions set forth in this subsection (1) and in
7		subsections (2), (3), (4), (5), (6), and (7) of this Section
8		shall apply to all policies and contracts, as appropriate,
9		subject to this Section issued prior to the operative date of
10		the Valuation Manual. The provisions set forth in subsections
11		(8) and (9) of this Section shall not apply to any such
12		policies and contracts.
13		For policies and contracts issued on or after the
14		operative date of the Valuation Manual, the Director shall
15		annually value, or cause to be valued, the reserve liabilities
16		(reserves) for all outstanding life insurance contracts,
17		annuity and pure endowment contracts, accident and health
18		contracts, and deposit-type contracts of every company issued
19		on or after the operative date of the Valuation Manual. In lieu
20		of the valuation of the reserves required of a foreign or
21		non-domestic alien company, the Director may accept a
22		valuation made, or caused to be made, by the insurance
23		supervisory official of any state or other jurisdiction when
24		the valuation complies with the minimum standard provided in
25		this Section.
26		The provisions set forth in subsections (8) and (9) of

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1		this Section shall apply to all policies and contracts issued
2		on or after the operative date of the Valuation Manual.
3		Any such company which adopts at any time a standard of
4		valuation producing greater aggregate reserves than those
5		calculated according to the minimum standard provided under
6		this Section may adopt a lower standard of valuation, with the
7		approval of the Director, but not lower than the minimum
8		herein provided, however, that, for the purposes of this
9		subsection, the holding of additional reserves previously
10		determined by the appointed actuary to be necessary to render
11		the opinion required by subsection (1a) shall not be deemed to
12		be the adoption of a higher standard of valuation. In the
13		valuation of policies the Director shall give no consideration
14		to, nor make any deduction because of, the existence or the
15		possession by the company of
16		(a) policy liens created by any agreement given or
17		assented to by any assured subsequent to July 1, 1937, for
18		which liens such assured has not received cash or other
19		consideration equal in value to the amount of such liens,
20		or
21		(b) policy liens created by any agreement entered into
22		in violation of Section 232 unless the agreement imposing
23		or creating such liens has been approved by a Court in a
24		proceeding under Article XIII, or in the case of a foreign
25		or non-domestic alien company has been approved by a court
26		in a rehabilitation or liquidation proceeding or by the

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1		insurance official of its domiciliary state or country, in
2		accordance with the laws thereof.
3		(1a) This subsection shall become operative at the end of
4		the first full calendar year following the effective date of
5		this amendatory Act of 1991.
6		(A) General.
7		(1) Prior to the operative date of the Valuation
8		Manual, every life insurance company doing business in
9		this State shall annually submit the opinion of a
10		qualified actuary as to whether the reserves and
11		related actuarial items held in support of the
12		policies and contracts specified by the Director by
13		regulation are computed appropriately, are based on
14		assumptions that satisfy contractual provisions, are
15		consistent with prior reported amounts and comply with
16		applicable laws of this State. The Director by
17		regulation shall define the specifics of this opinion
18		and add any other items deemed to be necessary to its
19		scope.
20		(2) The opinion shall be submitted with the annual
21		statement reflecting the valuation of reserve
22		liabilities for each year ending on or after December
23		31, 1992.
24		(3) The opinion shall apply to all business in
25		force including individual and group health insurance
26		plans, in form and substance acceptable to the

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1		Director as specified by regulation.
2		(4) The opinion shall be based on standards
3		adopted from time to time by the Actuarial Standards
4		Board and on additional standards as the Director may
5		by regulation prescribe.
6		(5) In the case of an opinion required to be
7		submitted by a foreign or non-domestic alien company,
8		the Director may accept the opinion filed by that
9		company with the insurance supervisory official of
10		another state if the Director determines that the
11		opinion reasonably meets the requirements applicable
12		to a company domiciled in this State.
13		(6) For the purpose of this Section, "qualified
14		actuary" means a member in good standing of the
15		American Academy of Actuaries who meets the
16		requirements set forth in its regulations.
17		(7) Except in cases of fraud or willful
18		misconduct, the qualified actuary shall not be liable
19		for damages to any person (other than the insurance
20		company and the Director) for any act, error,
21		omission, decision or conduct with respect to the
22		actuary's opinion.
23		(8) Disciplinary action by the Director against
24		the company or the qualified actuary shall be defined
25		in regulations by the Director.
26		(9) A memorandum, in form and substance acceptable

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1		to the Director as specified by regulation, shall be
2		prepared to support each actuarial opinion.
3		(10) If the insurance company fails to provide a
4		supporting memorandum at the request of the Director
5		within a period specified by regulation or the
6		Director determines that the supporting memorandum
7		provided by the insurance company fails to meet the
8		standards prescribed by the regulations or is
9		otherwise unacceptable to the Director, the Director
10		may engage a qualified actuary at the expense of the
11		company to review the opinion and the basis for the
12		opinion and prepare the supporting memorandum as is
13		required by the Director.
14		(11) Any memorandum in support of the opinion, and
15		any other material provided by the company to the
16		Director in connection therewith, shall be kept
17		confidential by the Director and shall not be made
18		public and shall not be subject to subpoena, other
19		than for the purpose of defending an action seeking
20		damages from any person by reason of any action
21		required by this Section or by regulations promulgated
22		hereunder; provided, however, that the memorandum or
23		other material may otherwise be released by the
24		Director (a) with the written consent of the company
25		or (b) to the American Academy of Actuaries upon
26		request stating that the memorandum or other material

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1		is required for the purpose of professional
2		disciplinary proceedings and setting forth procedures
3		satisfactory to the Director for preserving the
4		confidentiality of the memorandum or other material.
5		Once any portion of the confidential memorandum is
6		cited by the company in its marketing or is cited
7		before any governmental agency other than a state
8		insurance department or is released by the company to
9		the news media, all portions of the confidential
10		memorandum shall be no longer confidential.
11		(B) Actuarial analysis of reserves and assets
12		supporting those reserves.
13		(1) Every life insurance company, except as
14		exempted by or under regulation, shall also annually
15		include in the opinion required by paragraph (A)(1) of
16		this subsection (1a), an opinion of the same qualified
17		actuary as to whether the reserves and related
18		actuarial items held in support of the policies and
19		contracts specified by the Director by regulation,
20		when considered in light of the assets held by the
21		company with respect to the reserves and related
22		actuarial items including, but not limited to, the
23		investment earnings on the assets and the
24		considerations anticipated to be received and retained
25		under the policies and contracts, make adequate
26		provision for the company's obligations under the

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1		policies and contracts including, but not limited to,
2		the benefits under and expenses associated with the
3		policies and contracts.
4		(2) The Director may provide by regulation for a
5		transition period for establishing any higher reserves
6		which the qualified actuary may deem necessary in
7		order to render the opinion required by this Section.
8		(1b) Actuarial Opinion of Reserves after the Operative
9		Date of the Valuation Manual.
10		(A) General.
11		(1) Every company with outstanding life insurance
12		contracts, accident and health insurance contracts, or
13		deposit-type contracts in this State and subject to
14		regulation by the Director shall annually submit the
15		opinion of the appointed actuary as to whether the
16		reserves and related actuarial items held in support
17		of the policies and contracts are computed
18		appropriately, are based on assumptions that satisfy
19		contractual provisions, are consistent with prior
20		reported amounts, and comply with applicable laws of
21		this State. The Valuation Manual shall prescribe the
22		specifics of this opinion, including any items deemed
23		to be necessary to its scope.
24		(2) The opinion shall be submitted with the annual
25		statement reflecting the valuation of such reserve
26		liabilities for each year ending on or after the

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1		operative date of the Valuation Manual.
2		(3) The opinion shall apply to all policies and
3		contracts subject to paragraph (B) of this subsection
4		(1b), plus other actuarial liabilities as may be
5		specified in the Valuation Manual.
6		(4) The opinion shall be based on standards
7		adopted from time to time by the Actuarial Standards
8		Board or its successor and on additional standards as
9		may be prescribed in the Valuation Manual.
10		(5) In the case of an opinion required to be
11		submitted by a foreign or non-domestic alien company,
12		the Director may accept the opinion filed by that
13		company with the insurance supervisory official of
14		another state if the Director determines that the
15		opinion reasonably meets the requirements applicable
16		to a company domiciled in this State.
17		(6) Except in cases of fraud or willful
18		misconduct, the appointed actuary shall not be liable
19		for damages to any person (other than the insurance
20		company and the Director) for any act, error,
21		omission, decision, or conduct with respect to the
22		appointed actuary's opinion.
23		(7) Disciplinary action by the Director against
24		the company or the appointed actuary shall be defined
25		by the Director by rule.
26		(8) A memorandum, in a form and substance as

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1		specified in the Valuation Manual and acceptable to
2		the Director, shall be prepared to support each
3		actuarial opinion.
4		(9) If the insurance company fails to provide a
5		supporting memorandum at the request of the Director
6		within a period specified in the Valuation Manual or
7		the Director determines that the supporting memorandum
8		provided by the insurance company fails to meet the
9		standards prescribed by the Valuation Manual or is
10		otherwise unacceptable to the Director, the Director
11		may engage a qualified actuary at the expense of the
12		company to review the opinion and the basis for the
13		opinion and prepare the supporting memorandum as is
14		required by the Director.
15		(B) Every company with outstanding life insurance
16		contracts, accident and health insurance contracts, or
17		deposit-type contracts in this State and subject to
18		regulation by the Director, except as exempted in the
19		Valuation Manual, shall also annually include in the
20		opinion required by subparagraph (1) of paragraph (A) of
21		this subsection (1b), an opinion of the same appointed
22		actuary as to whether the reserves and related actuarial
23		items held in support of the policies and contracts
24		specified in the Valuation Manual, when considered in
25		light of the assets held by the company with respect to the
26		reserves and related actuarial items, including, but not

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1		limited to, the investment earnings on the assets and the
2		considerations anticipated to be received and retained
3		under the policies and contracts, make adequate provision
4		for the company's obligations under the policies and
5		contracts, including, but not limited to, the benefits
6		under and expenses associated with the policies and
7		contracts.
8		(2) This subsection shall apply to only those policies and
9		contracts issued prior to the operative date of Section 229.2
10		(the Standard Non-forfeiture Law).
11		(a) Except as otherwise in this Article provided, the
12		legal minimum standard for valuation of contracts issued
13		before January 1, 1908, shall be the Actuaries or Combined
14		Experience Table of Mortality with interest at 4% per
15		annum and for valuation of contracts issued on or after
16		that date shall be the American Experience Table of
17		Mortality with either Craig's or Buttolph's Extension for
18		ages under 10 and with interest at 3 1/2% per annum. The
19		legal minimum standard for the valuation of group
20		insurance policies under which premium rates are not
21		guaranteed for a period in excess of 5 years shall be the
22		American Men Ultimate Table of Mortality with interest at
23		3 1/2% per annum. Any life company may, at its option,
24		value its insurance contracts issued on or after January
25		1, 1938, in accordance with their terms on the basis of the
26		American Men Ultimate Table of Mortality with interest not

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1		higher than 3 1/2% per annum.
2		(b) Policies issued prior to January 1, 1908, may
3		continue to be valued according to a method producing
4		reserves not less than those produced by the full
5		preliminary term method. Policies issued on and after
6		January 1, 1908, may be valued according to a method
7		producing reserves not less than those produced by the
8		modified preliminary term method hereinafter described in
9		paragraph (c). Policies issued on and after January 1,
10		1938, may be valued either according to a method producing
11		reserves not less than those produced by such modified
12		preliminary term method or by the select and ultimate
13		method on the basis that the rate of mortality during the
14		first 5 years after the issuance of such contracts
15		respectively shall be calculated according to the
16		following percentages of rates shown by the American
17		Experience Table of Mortality:
18		(i) first insurance year 50% thereof;
19		(ii) second insurance year 65% thereof;
20		(iii) third insurance year 75% thereof;
21		(iv) fourth insurance year 85% thereof;
22		(v) fifth insurance year 95% thereof.
23		(c) If the premium charged for the first policy year
24		under a limited payment life preliminary term policy
25		providing for the payment of all premiums thereon in less
26		than 20 years from the date of the policy or under an

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1		endowment preliminary term policy, exceeds that charged
2		for the first policy year under 20 payment life
3		preliminary term policies of the same company, the reserve
4		thereon at the end of any year, including the first, shall
5		not be less than the reserve on a 20 payment life
6		preliminary term policy issued in the same year at the
7		same age, together with an amount which shall be
8		equivalent to the accumulation of a net level premium
9		sufficient to provide for a pure endowment at the end of
10		the premium payment period, equal to the difference
11		between the value at the end of such period of such a 20
12		payment life preliminary term policy and the full net
13		level premium reserve at such time of such a limited
14		payment life or endowment policy. The premium payment
15		period is the period during which premiums are
16		concurrently payable under such 20 payment life
17		preliminary term policy and such limited payment life or
18		endowment policy.
19		(d) The legal minimum standard for the valuations of
20		annuities issued on and after January 1, 1938, shall be
21		the American Annuitant's Table with interest not higher
22		than 3 3/4% per annum, and all annuities issued before
23		that date shall be valued on a basis not lower than that
24		used for the annual statement of the year 1937; but
25		annuities deferred 10 or more years and written in
26		connection with life insurance shall be valued on the same

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1		basis as that used in computing the consideration or
2		premiums therefor, or upon any higher standard at the
3		option of the company.
4		(e) The Director may vary the standards of interest
5		and mortality as to contracts issued in countries other
6		than the United States and may vary standards of mortality
7		in particular cases of invalid lives and other extra
8		hazards.
9		(f) The legal minimum standard for valuation of waiver
10		of premium disability benefits or waiver of premium and
11		income disability benefits issued on and after January 1,
12		1938, shall be the Class (3) Disability Table (1926)
13		modified to conform to the contractual waiting period,
14		with interest at not more than 3 1/2% per annum; but in no
15		event shall the values be less than those produced by the
16		basis used in computing premiums for such benefits. The
17		legal minimum standard for the valuation of such benefits
18		issued prior to January 1, 1938, shall be such as to place
19		an adequate value, as determined by sound insurance
20		practices, on the liabilities thereunder and shall be such
21		that the value of the benefits under each and every policy
22		shall in no case be less than the value placed upon the
23		future premiums.
24		(g) The legal minimum standard for the valuation of
25		industrial policies issued on or after January 1, 1938,
26		shall be the American Experience Table of Mortality or the

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1		Standard Industrial Mortality Table or the Substandard
2		Industrial Mortality Table with interest at 3 1/2% per
3		annum by the net level premium method, or in accordance
4		with their terms by the modified preliminary term method
5		hereinabove described.
6		(h) Reserves for all such policies and contracts may
7		be calculated, at the option of the company, according to
8		any standards which produce greater aggregate reserves for
9		all such policies and contracts than the minimum reserves
10		required by this subsection.
11		(3) This subsection shall apply to only those policies and
12		contracts issued on or after January 1, 1948 or such earlier
13		operative date of Section 229.2 (the Standard Non-forfeiture
14		Law) as shall have been elected by the insurance company
15		issuing such policies or contracts.
16		(a) Except as otherwise provided in subsections (4),
17		(6), and (7), the minimum standard for the valuation of
18		all such policies and contracts shall be the Commissioners
19		Reserve valuation method defined in paragraphs (b) and (f)
20		of this subsection and in subsection 5, 3 1/2% interest
21		for such policies issued prior to September 8, 1977, 5
22		1/2% interest for single premium life insurance policies
23		and 4 1/2% interest for all other such policies issued on
24		or after September 8, 1977, and the following tables:
25		(i) The Commissioners 1941 Standard Ordinary
26		Mortality Table for all Ordinary policies of life

SB3865 Engrossed - 394 - LRB102 24242 RJF 33473 b
1		insurance issued on the standard basis, excluding any
2		disability and accidental death benefits in such
3		policies, for such policies issued prior to the
4		operative date of subsection (4a) of Section 229.2
5		(Standard Non-forfeiture Law); and the Commissioners
6		1958 Standard Ordinary Mortality Table for such
7		policies issued on or after such operative date but
8		prior to the operative date of subsection (4c) of
9		Section 229.2 provided that for any category of such
10		policies issued on female risks all modified net
11		premiums and present values referred to in this
12		Section may, prior to September 8, 1977, be calculated
13		according to an age not more than 3 years younger than
14		the actual age of the insured and, after September 8,
15		1977, calculated according to an age not more than 6
16		years younger than the actual age of the insured; and
17		for such policies issued on or after the operative
18		date of subsection (4c) of Section 229.2, (i) the
19		Commissioners 1980 Standard Ordinary Mortality Table,
20		or (ii) at the election of the company for any one or
21		more specified plans of life insurance, the
22		Commissioners 1980 Standard Ordinary Mortality Table
23		with Ten-Year Select Mortality Factors, or (iii) any
24		ordinary mortality table adopted after 1980 by the
25		NAIC and approved by regulations promulgated by the
26		Director for use in determining the minimum standard

SB3865 Engrossed - 395 - LRB102 24242 RJF 33473 b
1		of valuation for such policies.
2		(ii) For all Industrial Life Insurance policies
3		issued on the standard basis, excluding any disability
4		and accidental death benefits in such policies--the
5		1941 Standard Industrial Mortality Table for such
6		policies issued prior to the operative date of
7		subsection 4 (b) of Section 229.2 (Standard
8		Non-forfeiture Law); and for such policies issued on
9		or after such operative date the Commissioners 1961
10		Standard Industrial Mortality Table or any industrial
11		mortality table adopted after 1980 by the NAIC and
12		approved by regulations promulgated by the Director
13		for use in determining the minimum standard of
14		valuation for such policies.
15		(iii) For Individual Annuity and Pure Endowment
16		contracts, excluding any disability and accidental
17		death benefits in such policies--the 1937 Standard
18		Annuity Mortality Table--or, at the option of the
19		company, the Annuity Mortality Table for 1949,
20		Ultimate, or any modification of either of these
21		tables approved by the Director.
22		(iv) For Group Annuity and Pure Endowment
23		contracts, excluding any disability and accidental
24		death benefits in such policies--the Group Annuity
25		Mortality Table for 1951, any modification of such
26		table approved by the Director, or, at the option of

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1		the company, any of the tables or modifications of
2		tables specified for Individual Annuity and Pure
3		Endowment contracts.
4		(v) For Total and Permanent Disability Benefits in
5		or supplementary to Ordinary policies or contracts for
6		policies or contracts issued on or after January 1,
7		1966, the tables of Period 2 disablement rates and the
8		1930 to 1950 termination rates of the 1952 Disability
9		Study of the Society of Actuaries, with due regard to
10		the type of benefit, or any tables of disablement
11		rates and termination rates adopted after 1980 by the
12		NAIC and approved by regulations promulgated by the
13		Director for use in determining the minimum standard
14		of valuation for such policies; for policies or
15		contracts issued on or after January 1, 1961, and
16		prior to January 1, 1966, either such tables or, at the
17		option of the company, the Class (3) Disability Table
18		(1926); and for policies issued prior to January 1,
19		1961, the Class (3) Disability Table (1926). Any such
20		table shall, for active lives, be combined with a
21		mortality table permitted for calculating the reserves
22		for life insurance policies.
23		(vi) For Accidental Death benefits in or
24		supplementary to policies--for policies issued on or
25		after January 1, 1966, the 1959 Accidental Death
26		Benefits Table or any accidental death benefits table

SB3865 Engrossed - 397 - LRB102 24242 RJF 33473 b
1		adopted after 1980 by the NAIC and approved by
2		regulations promulgated by the Director for use in
3		determining the minimum standard of valuation for such
4		policies; for policies issued on or after January 1,
5		1961, and prior to January 1, 1966, any of such tables
6		or, at the option of the company, the Inter-Company
7		Double Indemnity Mortality Table; and for policies
8		issued prior to January 1, 1961, the Inter-Company
9		Double Indemnity Mortality Table. Either table shall
10		be combined with a mortality table permitted for
11		calculating the reserves for life insurance policies.
12		(vii) For Group Life Insurance, life insurance
13		issued on the substandard basis and other special
14		benefits--such tables as may be approved by the
15		Director.
16		(b) Except as otherwise provided in paragraph (f) of
17		subsection (3), subsection (5), and subsection (7)
18		reserves according to the Commissioners reserve valuation
19		method, for the life insurance and endowment benefits of
20		policies providing for a uniform amount of insurance and
21		requiring the payment of uniform premiums shall be the
22		excess, if any, of the present value, at the date of
23		valuation, of such future guaranteed benefits provided for
24		by such policies, over the then present value of any
25		future modified net premiums therefor. The modified net
26		premiums for any such policy shall be such uniform

SB3865 Engrossed - 398 - LRB102 24242 RJF 33473 b
1		percentage of the respective contract premiums for such
2		benefits that the present value, at the date of issue of
3		the policy, of all such modified net premiums shall be
4		equal to the sum of the then present value of such benefits
5		provided for by the policy and the excess of (A) over (B),
6		as follows:
7		(A) A net level annual premium equal to the
8		present value, at the date of issue, of such benefits
9		provided for after the first policy year, divided by
10		the present value, at the date of issue, of an annuity
11		of one per annum payable on the first and each
12		subsequent anniversary of such policy on which a
13		premium falls due; provided, however, that such net
14		level annual premium shall not exceed the net level
15		annual premium on the 19 year premium whole life plan
16		for insurance of the same amount at an age one year
17		higher than the age at issue of such policy.
18		(B) A net one year term premium for such benefits
19		provided for in the first policy year.
20		For any life insurance policy issued on or after
21		January 1, 1987, for which the contract premium in the
22		first policy year exceeds that of the second year with no
23		comparable additional benefit being provided in that first
24		year, which policy provides an endowment benefit or a cash
25		surrender value or a combination thereof in an amount
26		greater than such excess premium, the reserve according to

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1		the Commissioners reserve valuation method as of any
2		policy anniversary occurring on or before the assumed
3		ending date, defined herein as the first policy
4		anniversary on which the sum of any endowment benefit and
5		any cash surrender value then available is greater than
6		such excess premium, shall, except as otherwise provided
7		in paragraph (f) of subsection (3), be the greater of the
8		reserve as of such policy anniversary calculated as
9		described in the preceding part of this paragraph (b) and
10		the reserve as of such policy anniversary calculated as
11		described in the preceding part of this paragraph (b) with
12		(i) the value defined in subpart A of the preceding part of
13		this paragraph (b) being reduced by 15% of the amount of
14		such excess first year premium, (ii) all present values of
15		benefits and premiums being determined without reference
16		to premiums or benefits provided for by the policy after
17		the assumed ending date, (iii) the policy being assumed to
18		mature on such date as an endowment, and (iv) the cash
19		surrender value provided on such date being considered as
20		an endowment benefit. In making the above comparison, the
21		mortality and interest bases stated in paragraph (a) of
22		subsection (3) and in subsection (6) shall be used.
23		Reserves according to the Commissioners reserve
24		valuation method for (i) life insurance policies providing
25		for a varying amount of insurance or requiring the payment
26		of varying premiums, (ii) group annuity and pure endowment

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1		contracts purchased under a retirement plan or plan of
2		deferred compensation, established or maintained by an
3		employer (including a partnership or sole proprietorship)
4		or by an employee organization, or by both, other than a
5		plan providing individual retirement accounts or
6		individual retirement annuities under Section 408 of the
7		Internal Revenue Code, as now or hereafter amended, (iii)
8		disability and accidental death benefits in all policies
9		and contracts, and (iv) all other benefits, except life
10		insurance and endowment benefits in life insurance
11		policies and benefits provided by all other annuity and
12		pure endowment contracts, shall be calculated by a method
13		consistent with the principles of this paragraph (b),
14		except that any extra premiums charged because of
15		impairments or special hazards shall be disregarded in the
16		determination of modified net premiums.
17		(c) In no event shall a company's aggregate reserves
18		for all life insurance policies, excluding disability and
19		accidental death benefits be less than the aggregate
20		reserves calculated in accordance with the methods set
21		forth in paragraphs (b), (f), and (g) of subsection (3)
22		and in subsection (5) and the mortality table or tables
23		and rate or rates of interest used in calculating
24		non-forfeiture benefits for such policies.
25		(d) In no event shall the aggregate reserves for all
26		policies, contracts, and benefits be less than the

SB3865 Engrossed - 401 - LRB102 24242 RJF 33473 b
1		aggregate reserves determined by the appointed actuary to
2		be necessary to render the opinion required by subsection
3		(1a).
4		(e) Reserves for any category of policies, contracts
5		or benefits as established by the Director, may be
6		calculated, at the option of the company, according to any
7		standards which produce greater aggregate reserves for
8		such category than those calculated according to the
9		minimum standard herein provided, but the rate or rates of
10		interest used for policies and contracts, other than
11		annuity and pure endowment contracts, shall not be higher
12		than the corresponding rate or rates of interest used in
13		calculating any nonforfeiture benefits provided for
14		therein.
15		(f) If in any contract year the gross premium charged
16		by any life insurance company on any policy or contract is
17		less than the valuation net premium for the policy or
18		contract calculated by the method used in calculating the
19		reserve thereon but using the minimum valuation standards
20		of mortality and rate of interest, the minimum reserve
21		required for such policy or contract shall be the greater
22		of either the reserve calculated according to the
23		mortality table, rate of interest, and method actually
24		used for such policy or contract, or the reserve
25		calculated by the method actually used for such policy or
26		contract but using the minimum standards of mortality and

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1		rate of interest and replacing the valuation net premium
2		by the actual gross premium in each contract year for
3		which the valuation net premium exceeds the actual gross
4		premium. The minimum valuation standards of mortality and
5		rate of interest referred to in this paragraph (f) are
6		those standards stated in subsection (6) and paragraph (a)
7		of subsection (3).
8		For any life insurance policy issued on or after
9		January 1, 1987, for which the gross premium in the first
10		policy year exceeds that of the second year with no
11		comparable additional benefit provided in that first year,
12		which policy provides an endowment benefit or a cash
13		surrender value or a combination thereof in an amount
14		greater than such excess premium, the foregoing provisions
15		of this paragraph (f) shall be applied as if the method
16		actually used in calculating the reserve for such policy
17		were the method described in paragraph (b) of subsection
18		(3), ignoring the second paragraph of said paragraph (b).
19		The minimum reserve at each policy anniversary of such a
20		policy shall be the greater of the minimum reserve
21		calculated in accordance with paragraph (b) of subsection
22		(3), including the second paragraph of said paragraph (b),
23		and the minimum reserve calculated in accordance with this
24		paragraph (f).
25		(g) In the case of any plan of life insurance which
26		provides for future premium determination, the amounts of

SB3865 Engrossed - 403 - LRB102 24242 RJF 33473 b
1		which are to be determined by the insurance company based
2		on then estimates of future experience, or in the case of
3		any plan of life insurance or annuity which is of such a
4		nature that the minimum reserves cannot be determined by
5		the methods described in paragraphs (b) and (f) of
6		subsection (3) and subsection (5), the reserves which are
7		held under any such plan shall:
8		(i) be appropriate in relation to the benefits and
9		the pattern of premiums for that plan, and
10		(ii) be computed by a method which is consistent
11		with the principles of this Standard Valuation Law, as
12		determined by regulations promulgated by the Director.
13		(4) Except as provided in subsection (6), the minimum
14		standard of valuation for individual annuity and pure
15		endowment contracts issued on or after the operative date of
16		this subsection, as defined herein, and for all annuities and
17		pure endowments purchased on or after such operative date
18		under group annuity and pure endowment contracts shall be the
19		Commissioners Reserve valuation methods defined in paragraph
20		(b) of subsection (3) and subsection (5) and the following
21		tables and interest rates:
22		(a) For individual single premium immediate annuity
23		contracts, excluding any disability and accidental death
24		benefits in such contracts, the 1971 Individual Annuity
25		Mortality Table, any individual annuity mortality table
26		adopted after 1980 by the NAIC and approved by regulations

SB3865 Engrossed - 404 - LRB102 24242 RJF 33473 b
1		promulgated by the Director for use in determining the
2		minimum standard of valuation for such contracts, or any
3		modification of those tables approved by the Director, and
4		7 1/2% interest.
5		(b) For individual and pure endowment contracts other
6		than single premium annuity contracts, excluding any
7		disability and accidental death benefits in such
8		contracts, the 1971 Individual Annuity Mortality Table,
9		any individual annuity mortality table adopted after 1980
10		by the NAIC and approved by regulations promulgated by the
11		Director for use in determining the minimum standard of
12		valuation for such contracts, or any modification of those
13		tables approved by the Director, and 5 1/2% interest for
14		single premium deferred annuity and pure endowment
15		contracts and 4 1/2% interest for all other such
16		individual annuity and pure endowment contracts.
17		(c) For all annuities and pure endowments purchased
18		under group annuity and pure endowment contracts,
19		excluding any disability and accidental death benefits
20		purchased under such contracts, the 1971 Group Annuity
21		Mortality Table, any group annuity mortality table adopted
22		after 1980 by the NAIC and approved by regulations
23		promulgated by the Director for use in determining the
24		minimum standard of valuation for such annuities and pure
25		endowments, or any modification of those tables approved
26		by the Director, and 7 1/2% interest.

SB3865 Engrossed - 405 - LRB102 24242 RJF 33473 b
1		After September 8, 1977, any company may file with the
2		Director a written notice of its election to comply with the
3		provisions of this subsection after a specified date before
4		January 1, 1979, which shall be the operative date of this
5		subsection for such company; provided, a company may elect a
6		different operative date for individual annuity and pure
7		endowment contracts from that elected for group annuity and
8		pure endowment contracts. If a company makes no election, the
9		operative date of this subsection for such company shall be
10		January 1, 1979.
11		(5) This subsection shall apply to all annuity and pure
12		endowment contracts other than group annuity and pure
13		endowment contracts purchased under a retirement plan or plan
14		of deferred compensation, established or maintained by an
15		employer (including a partnership or sole proprietorship) or
16		by an employee organization, or by both, other than a plan
17		providing individual retirement accounts or individual
18		retirement annuities under Section 408 of the Internal Revenue
19		Code, as now or hereafter amended.
20		Reserves according to the Commissioners annuity reserve
21		method for benefits under annuity or pure endowment contracts,
22		excluding any disability and accidental death benefits in such
23		contracts, shall be the greatest of the respective excesses of
24		the present values, at the date of valuation, of the future
25		guaranteed benefits, including guaranteed nonforfeiture
26		benefits, provided for by such contracts at the end of each

SB3865 Engrossed - 406 - LRB102 24242 RJF 33473 b
1		respective contract year, over the present value, at the date
2		of valuation, of any future valuation considerations derived
3		from future gross considerations, required by the terms of
4		such contract, that become payable prior to the end of such
5		respective contract year. The future guaranteed benefits shall
6		be determined by using the mortality table, if any, and the
7		interest rate, or rates, specified in such contracts for
8		determining guaranteed benefits. The valuation considerations
9		are the portions of the respective gross considerations
10		applied under the terms of such contracts to determine
11		nonforfeiture values.
12		(6)(a) Applicability of this subsection. The interest
13		rates used in determining the minimum standard for the
14		valuation of
15		(A) all life insurance policies issued in a particular
16		calendar year, on or after the operative date of
17		subsection (4c) of Section 229.2 (Standard Nonforfeiture
18		Law),
19		(B) all individual annuity and pure endowment
20		contracts issued in a particular calendar year ending on
21		or after December 31, 1983,
22		(C) all annuities and pure endowments purchased in a
23		particular calendar year ending on or after December 31,
24		1983, under group annuity and pure endowment contracts,
25		and
26		(D) the net increase in a particular calendar year

SB3865 Engrossed - 407 - LRB102 24242 RJF 33473 b
1		ending after December 31, 1983, in amounts held under
2		guaranteed interest contracts
3		shall be the calendar year statutory valuation interest rates,
4		as defined in this subsection.
5		(b) Calendar Year Statutory Valuation Interest Rates.
6		(i) The calendar year statutory valuation interest
7		rates shall be determined according to the following
8		formulae, rounding "I" to the nearest .25%.
9		(A) For life insurance,
10		I = .03 + W (R1 - .03) + W/2 (R2 - .09).
11		(B) For single premium immediate annuities and
12		annuity benefits involving life contingencies
13		arising from other annuities with cash settlement
14		options and from guaranteed interest contracts
15		with cash settlement options,
16		I = .03 + W (R - .03) or with prior
17		approval of the Director I = .03 + W (Rq -
18		.03).
19		For the purposes of this subparagraph (i), "I"
20		equals the calendar year statutory valuation interest
21		rate, "R" is the reference interest rate defined in
22		this subsection, "R1" is the lesser of R and .09, "R2"
23		is the greater of R and .09, "Rq" is the quarterly
24		reference interest rate defined in this subsection,
25		and "W" is the weighting factor defined in this
26		subsection.

SB3865 Engrossed - 408 - LRB102 24242 RJF 33473 b
1		(C) For other annuities with cash settlement
2		options and guaranteed interest contracts with
3		cash settlement options, valued on an issue year
4		basis, except as stated in (B), the formula for
5		life insurance stated in (A) applies to annuities
6		and guaranteed interest contracts with guarantee
7		durations in excess of 10 years, and the formula
8		for single premium immediate annuities stated in
9		(B) above applies to annuities and guaranteed
10		interest contracts with guarantee durations of 10
11		years or less.
12		(D) For other annuities with no cash
13		settlement options and for guaranteed interest
14		contracts with no cash settlement options, the
15		formula for single premium immediate annuities
16		stated in (B) applies.
17		(E) For other annuities with cash settlement
18		options and guaranteed interest contracts with
19		cash settlement options, valued on a change in
20		fund basis, the formula for single premium
21		immediate annuities stated in (B) applies.
22		(ii) If the calendar year statutory valuation
23		interest rate for any life insurance policy issued in
24		any calendar year determined without reference to this
25		subparagraph differs from the corresponding actual
26		rate for similar policies issued in the immediately

SB3865 Engrossed - 409 - LRB102 24242 RJF 33473 b
1		preceding calendar year by less than .5%, the calendar
2		year statutory valuation interest rate for such life
3		insurance policy shall be the corresponding actual
4		rate for the immediately preceding calendar year. For
5		purposes of applying this subparagraph, the calendar
6		year statutory valuation interest rate for life
7		insurance policies issued in a calendar year shall be
8		determined for 1980, using the reference interest rate
9		defined for 1979, and shall be determined for each
10		subsequent calendar year regardless of when subsection
11		(4c) of Section 229.2 (Standard Nonforfeiture Law)
12		becomes operative.
13		(c) Weighting Factors.
14		(i) The weighting factors referred to in the
15		formulae stated in paragraph (b) are given in the
16		following tables.
17		(A) Weighting Factors for Life Insurance.
18 Guarantee Weighting 19 Duration Factors 20 (Years) 21 10 or less .50 22 More than 10, but not more than 20 .45 23 More than 20 .35
24		For life insurance, the guarantee duration is
25		the maximum number of years the life insurance can
26		remain in force on a basis guaranteed in the

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1		policy or under options to convert to plans of
2		life insurance with premium rates or nonforfeiture
3		values or both which are guaranteed in the
4		original policy.
5		(B) The weighting factor for single premium
6		immediate annuities and for annuity benefits
7		involving life contingencies arising from other
8		annuities with cash settlement options and
9		guaranteed interest contracts with cash settlement
10		options is .80.
11		(C) The weighting factors for other annuities
12		and for guaranteed interest contracts, except as
13		stated in (B) of this subparagraph (i), shall be
14		as specified in tables (1), (2), and (3) of this
15		subpart (C), according to the rules and
16		definitions in (4), (5) and (6) of this subpart
17		(C).
18		(1) For annuities and guaranteed interest
19		contracts valued on an issue year basis.
20 Guarantee Weighting Factor 21 Duration for Plan Type 22 (Years) A B C 23 5 or less..................................... .80 .60 .50 24 More than 5, but not 25 more than 10.................................. .75 .60 .50 26 More than 10, but not

SB3865 Engrossed - 411 - LRB102 24242 RJF 33473 b
1 more than 20.................................. .65 .50 .45 2 More than 20.................................. .45 .35 .35
3		(2) For annuities and guaranteed interest
4		contracts valued on a change in fund basis,
5		the factors shown in (1) for Plan Types A, B
6		and C are increased by .15, .25 and .05,
7		respectively.
8		(3) For annuities and guaranteed interest
9		contracts valued on an issue year basis, other
10		than those with no cash settlement options,
11		which do not guarantee interest on
12		considerations received more than one year
13		after issue or purchase, and for annuities and
14		guaranteed interest contracts valued on a
15		change in fund basis which do not guarantee
16		interest rates on considerations received more
17		than 12 months beyond the valuation date, the
18		factors shown in (1), or derived in (2), for
19		Plan Types A, B and C are increased by .05.
20		(4) For other annuities with cash
21		settlement options and guaranteed interest
22		contracts with cash settlement options, the
23		guarantee duration is the number of years for
24		which the contract guarantees interest rates
25		in excess of the calendar year statutory
26		valuation interest rate for life insurance

SB3865 Engrossed - 412 - LRB102 24242 RJF 33473 b
1		policies with guarantee durations in excess of
2		20 years. For other annuities with no cash
3		settlement options, and for guaranteed
4		interest contracts with no cash settlement
5		options, the guarantee duration is the number
6		of years from the date of issue or date of
7		purchase to the date annuity benefits are
8		scheduled to commence.
9		(5) The plan types used in the above
10		tables are defined as follows.
11		Plan Type A is a plan under which the
12		policyholder may not withdraw funds, or may
13		withdraw funds at any time but only (a) with
14		an adjustment to reflect changes in interest
15		rates or asset values since receipt of the
16		funds by the insurance company, (b) without
17		such an adjustment but in installments over 5
18		years or more, or (c) as an immediate life
19		annuity.
20		Plan Type B is a plan under which the
21		policyholder may not withdraw funds before
22		expiration of the interest rate guarantee, or
23		may withdraw funds before such expiration but
24		only (a) with an adjustment to reflect changes
25		in interest rates or asset values since
26		receipt of the funds by the insurance company,

SB3865 Engrossed - 413 - LRB102 24242 RJF 33473 b
1		or (b) without such adjustment but in
2		installments over 5 years or more. At the end
3		of the interest rate guarantee, funds may be
4		withdrawn without such adjustment in a single
5		sum or installments over less than 5 years.
6		Plan Type C is a plan under which the
7		policyholder may withdraw funds before
8		expiration of the interest rate guarantee in a
9		single sum or installments over less than 5
10		years either (a) without adjustment to reflect
11		changes in interest rates or asset values
12		since receipt of the funds by the insurance
13		company, or (b) subject only to a fixed
14		surrender charge stipulated in the contract as
15		a percentage of the fund.
16		(6) A company may elect to value
17		guaranteed interest contracts with cash
18		settlement options and annuities with cash
19		settlement options on either an issue year
20		basis or on a change in fund basis. Guaranteed
21		interest contracts with no cash settlement
22		options and other annuities with no cash
23		settlement options shall be valued on an issue
24		year basis. As used in this Section, "issue
25		year basis of valuation" refers to a valuation
26		basis under which the interest rate used to

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1		determine the minimum valuation standard for
2		the entire duration of the annuity or
3		guaranteed interest contract is the calendar
4		year valuation interest rate for the year of
5		issue or year of purchase of the annuity or
6		guaranteed interest contract. "Change in fund
7		basis of valuation", as used in this Section,
8		refers to a valuation basis under which the
9		interest rate used to determine the minimum
10		valuation standard applicable to each change
11		in the fund held under the annuity or
12		guaranteed interest contract is the calendar
13		year valuation interest rate for the year of
14		the change in the fund.
15		(d) Reference Interest Rate. The reference interest
16		rate referred to in paragraph (b) of this subsection is
17		defined as follows.
18		(A) For all life insurance, the reference interest
19		rate is the lesser of the average over a period of 36
20		months, and the average over a period of 12 months,
21		with both periods ending on June 30, or with prior
22		approval of the Director ending on December 31, of the
23		calendar year next preceding the year of issue, of
24		Moody's Corporate Bond Yield Average - Monthly Average
25		Corporates, as published by Moody's Investors Service,
26		Inc.

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1		(B) For single premium immediate annuities and for
2		annuity benefits involving life contingencies arising
3		from other annuities with cash settlement options and
4		guaranteed interest contracts with cash settlement
5		options, the reference interest rate is the average
6		over a period of 12 months, ending on June 30, or with
7		prior approval of the Director ending on December 31,
8		of the calendar year of issue or year of purchase, of
9		Moody's Corporate Bond Yield Average - Monthly Average
10		Corporates, as published by Moody's Investors Service,
11		Inc.
12		(C) For annuities with cash settlement options and
13		guaranteed interest contracts with cash settlement
14		options, valued on a year of issue basis, except those
15		described in (B), with guarantee durations in excess
16		of 10 years, the reference interest rate is the lesser
17		of the average over a period of 36 months and the
18		average over a period of 12 months, ending on June 30,
19		or with prior approval of the Director ending on
20		December 31, of the calendar year of issue or
21		purchase, of Moody's Corporate Bond Yield
22		Average-Monthly Average Corporates, as published by
23		Moody's Investors Service, Inc.
24		(D) For other annuities with cash settlement
25		options and guaranteed interest contracts with cash
26		settlement options, valued on a year of issue basis,

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1		except those described in (B), with guarantee
2		durations of 10 years or less, the reference interest
3		rate is the average over a period of 12 months, ending
4		on June 30, or with prior approval of the Director
5		ending on December 31, of the calendar year of issue or
6		purchase, of Moody's Corporate Bond Yield
7		Average-Monthly Average Corporates, as published by
8		Moody's Investors Service, Inc.
9		(E) For annuities with no cash settlement options
10		and for guaranteed interest contracts with no cash
11		settlement options, the reference interest rate is the
12		average over a period of 12 months, ending on June 30,
13		or with prior approval of the Director ending on
14		December 31, of the calendar year of issue or
15		purchase, of Moody's Corporate Bond Yield
16		Average-Monthly Average Corporates, as published by
17		Moody's Investors Service, Inc.
18		(F) For annuities with cash settlement options and
19		guaranteed interest contracts with cash settlement
20		options, valued on a change in fund basis, except
21		those described in (B), the reference interest rate is
22		the average over a period of 12 months, ending on June
23		30, or with prior approval of the Director ending on
24		December 31, of the calendar year of the change in the
25		fund, of Moody's Corporate Bond Yield Average-Monthly
26		Average Corporates, as published by Moody's Investors

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1		Service, Inc.
2		(G) For annuities valued by a formula based on Rq,
3		the quarterly reference interest rate is, with the
4		prior approval of the Director, the average within
5		each of the 4 consecutive calendar year quarters
6		ending on March 31, June 30, September 30 and December
7		31 of the calendar year of issue or year of purchase of
8		Moody's Corporate Bond Yield Average-Monthly Average
9		Corporates, as published by Moody's Investors Service,
10		Inc.
11		(e) Alternative Method for Determining Reference
12		Interest Rates. In the event that the Moody's Corporate
13		Bond Yield Average-Monthly Average Corporates is no longer
14		published by Moody's Investors Services, Inc., or in the
15		event that the NAIC determines that Moody's Corporate Bond
16		Yield Average-Monthly Average Corporates as published by
17		Moody's Investors Service, Inc. is no longer appropriate
18		for the determination of the reference interest rate, then
19		an alternative method for determination of the reference
20		interest rate, which is adopted by the NAIC and approved
21		by regulations promulgated by the Director, may be
22		substituted.
23		(7) Minimum Standards for Accident and Health (Disability,
24		Accident and Sickness) Insurance Contracts. The Director shall
25		promulgate a regulation containing the minimum standards
26		applicable to the valuation of health (disability, sickness

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1		and accident) plans which are issued prior to the operative
2		date of the Valuation Manual. For accident and health
3		(disability, accident and sickness) insurance contracts issued
4		on or after the operative date of the Valuation Manual, the
5		standard prescribed in the Valuation Manual is the minimum
6		standard of valuation required under subsection (1).
7		(8) Valuation Manual for Policies Issued On or After the
8		Operative Date of the Valuation Manual.
9		(a) For policies issued on or after the operative date
10		of the Valuation Manual, the standard prescribed in the
11		Valuation Manual is the minimum standard of valuation
12		required under subsection (1), except as provided under
13		paragraphs (e) or (g) of this subsection (8).
14		(b) The operative date of the Valuation Manual is
15		January 1 of the first calendar year following the first
16		July 1 when all of the following have occurred:
17		(i) The Valuation Manual has been adopted by the
18		NAIC by an affirmative vote of at least 42 members, or
19		three-fourths of the members voting, whichever is
20		greater.
21		(ii) The Standard Valuation Law, as amended by the
22		NAIC in 2009, or legislation including substantially
23		similar terms and provisions, has been enacted by
24		states representing greater than 75% of the direct
25		premiums written as reported in the following annual
26		statements submitted for 2008: life, accident and

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1		health annual statements; health annual statements; or
2		fraternal annual statements.
3		(iii) The Standard Valuation Law, as amended by
4		the NAIC in 2009, or legislation including
5		substantially similar terms and provisions, has been
6		enacted by at least 42 of the following 55
7		jurisdictions: the 50 states of the United States,
8		American Samoa, the American Virgin Islands, the
9		District of Columbia, Guam, and Puerto Rico.
10		(c) Unless a change in the Valuation Manual specifies
11		a later effective date, changes to the Valuation Manual
12		shall be effective on January 1 following the date when
13		the change to the Valuation Manual has been adopted by the
14		NAIC by an affirmative vote representing:
15		(i) at least three-fourths of the members of the
16		NAIC voting, but not less than a majority of the total
17		membership; and
18		(ii) members of the NAIC representing
19		jurisdictions totaling greater than 75% of the direct
20		premiums written as reported in the following annual
21		statements most recently available prior to the vote
22		in subparagraph (i) of this paragraph (c): life,
23		accident and health annual statements; health annual
24		statements; or fraternal annual statements.
25		(d) The Valuation Manual must specify all of the
26		following:

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1		(i) Minimum valuation standards for and
2		definitions of the policies or contracts subject to
3		subsection (1). Such minimum valuation standards shall
4		be:
5		(A) the Commissioners reserve valuation method
6		for life insurance contracts, other than annuity
7		contracts, subject to subsection (1);
8		(B) the Commissioners annuity reserve
9		valuation method for annuity contracts subject to
10		subsection (1); and
11		(C) minimum reserves for all other policies or
12		contracts subject to subsection (1).
13		(ii) Which policies or contracts or types of
14		policies or contracts are subject to the requirements
15		of a principle-based valuation in paragraph (a) of
16		subsection (9) and the minimum valuation standards
17		consistent with those requirements.
18		(iii) For policies and contracts subject to a
19		principle-based valuation under subsection (9):
20		(A) Requirements for the format of reports to
21		the Director under subparagraph (iii) of paragraph
22		(b) of subsection (9), and which shall include
23		information necessary to determine if the
24		valuation is appropriate and in compliance with
25		this Section.
26		(B) Assumptions shall be prescribed for risks

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1		over which the company does not have significant
2		control or influence.
3		(C) Procedures for corporate governance and
4		oversight of the actuarial function, and a process
5		for appropriate waiver or modification of such
6		procedures.
7		(iv) For policies not subject to a principle-based
8		valuation under subsection (9), the minimum valuation
9		standard shall either:
10		(A) be consistent with the minimum standard of
11		valuation prior to the operative date of the
12		Valuation Manual; or
13		(B) develop reserves that quantify the
14		benefits and guarantees and the funding associated
15		with the contracts and their risks at a level of
16		conservatism that reflects conditions that include
17		unfavorable events that have a reasonable
18		probability of occurring.
19		(v) Other requirements, including, but not limited
20		to, those relating to reserve methods, models for
21		measuring risk, generation of economic scenarios,
22		assumptions, margins, use of company experience, risk
23		measurement, disclosure, certifications, reports,
24		actuarial opinions and memorandums, transition rules,
25		and internal controls.
26		(vi) The data and form of the data required under

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1		subsection (10) of this Section, with whom the data
2		must be submitted, and may specify other requirements,
3		including data analyses and the reporting of analyses.
4		(e) In the absence of a specific valuation requirement
5		or if a specific valuation requirement in the Valuation
6		Manual is not, in the opinion of the Director, in
7		compliance with this Section, then the company shall, with
8		respect to such requirements, comply with minimum
9		valuation standards prescribed by the Director by rule.
10		(f) The Director may engage a qualified actuary, at
11		the expense of the company, to perform an actuarial
12		examination of the company and opine on the
13		appropriateness of any reserve assumption or method used
14		by the company, or to review and opine on a company's
15		compliance with any requirement set forth in this Section.
16		The Director may rely upon the opinion regarding
17		provisions contained within this Section of a qualified
18		actuary engaged by the Director of another state,
19		district, or territory of the United States. As used in
20		this paragraph, "engage" includes employment and
21		contracting.
22		(g) The Director may require a company to change any
23		assumption or method that in the opinion of the Director
24		is necessary in order to comply with the requirements of
25		the Valuation Manual or this Section; and the company
26		shall adjust the reserves as required by the Director. The

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1		Director may take other disciplinary action as permitted
2		pursuant to law.
3		(9) Requirements of a Principle-Based Valuation.
4		(a) A company must establish reserves using a
5		principle-based valuation that meets the following
6		conditions for policies or contracts as specified in the
7		Valuation Manual:
8		(i) Quantify the benefits and guarantees, and the
9		funding, associated with the contracts and their risks
10		at a level of conservatism that reflects conditions
11		that include unfavorable events that have a reasonable
12		probability of occurring during the lifetime of the
13		contracts. For policies or contracts with significant
14		tail risk, reflect conditions appropriately adverse to
15		quantify the tail risk.
16		(ii) Incorporate assumptions, risk analysis
17		methods, and financial models and management
18		techniques that are consistent with, but not
19		necessarily identical to, those utilized within the
20		company's overall risk assessment process, while
21		recognizing potential differences in financial
22		reporting structures and any prescribed assumptions or
23		methods.
24		(iii) Incorporate assumptions that are derived in
25		one of the following manners:
26		(A) The assumption is prescribed in the

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1		Valuation Manual.
2		(B) For assumptions that are not prescribed,
3		the assumptions shall:
4		(1) be established utilizing the company's
5		available experience, to the extent it is
6		relevant and statistically credible; or
7		(2) to the extent that company data is not
8		available, relevant, or statistically
9		credible, be established utilizing other
10		relevant, statistically credible experience.
11		(iv) Provide margins for uncertainty, including
12		adverse deviation and estimation error, such that the
13		greater the uncertainty, the larger the margin and
14		resulting reserve.
15		(b) A company using a principle-based valuation for
16		one or more policies or contracts subject to this
17		subsection as specified in the Valuation Manual shall:
18		(i) Establish procedures for corporate governance
19		and oversight of the actuarial valuation function
20		consistent with those described in the Valuation
21		Manual.
22		(ii) Provide to the Director and the board of
23		directors an annual certification of the effectiveness
24		of the internal controls with respect to the
25		principle-based valuation. Such controls shall be
26		designed to ensure that all material risks inherent in

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1		the liabilities and associated assets subject to such
2		valuation are included in the valuation, and that
3		valuations are made in accordance with the Valuation
4		Manual. The certification shall be based on the
5		controls in place as of the end of the preceding
6		calendar year.
7		(iii) Develop and file with the Director upon
8		request a principle-based valuation report that
9		complies with standards prescribed in the Valuation
10		Manual.
11		(c) A principle-based valuation may include a
12		prescribed formulaic reserve component.
13		(10) Experience Reporting for Policies In Force On or
14		After the Operative Date of the Valuation Manual. A company
15		shall submit mortality, morbidity, policyholder behavior, or
16		expense experience and other data as prescribed in the
17		Valuation Manual.
18		(11) Confidentiality.
19		(a) For the purposes of this subsection (11),
20		"confidential information" means any of the following:
21		(i) A memorandum in support of an opinion
22		submitted under subsection (1) of this Section and any
23		other documents, materials, and other information,
24		including, but not limited to, all working papers, and
25		copies thereof, created, produced or obtained by or
26		disclosed to the Director or any other person in

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1		connection with the memorandum.
2		(ii) All documents, materials, and other
3		information, including, but not limited to, all
4		working papers, and copies thereof, created, produced,
5		or obtained by or disclosed to the Director or any
6		other person in the course of an examination made
7		under paragraph (f) of subsection (8) of this Section.
8		(iii) Any reports, documents, materials, and other
9		information developed by a company in support of, or
10		in connection with, an annual certification by the
11		company under subparagraph (ii) of paragraph (b) of
12		subsection (9) of this Section evaluating the
13		effectiveness of the company's internal controls with
14		respect to a principle-based valuation and any other
15		documents, materials, and other information,
16		including, but not limited to, all working papers, and
17		copies thereof, created, produced, or obtained by or
18		disclosed to the Director or any other person in
19		connection with such reports, documents, materials,
20		and other information.
21		(iv) Any principle-based valuation report
22		developed under subparagraph (iii) of paragraph (b) of
23		subsection (9) of this Section and any other
24		documents, materials and other information, including,
25		but not limited to, all working papers, and copies
26		thereof, created, produced or obtained by or disclosed

SB3865 Engrossed - 427 - LRB102 24242 RJF 33473 b
1		to the Director or any other person in connection with
2		such report.
3		(v) Any documents, materials, data, and other
4		information submitted by a company under subsection
5		(10) of this Section (collectively, "experience data")
6		and any other documents, materials, data, and other
7		information, including, but not limited to, all
8		working papers, and copies thereof, created or
9		produced in connection with such experience data, in
10		each case that include any potentially
11		company-identifying or personally identifiable
12		information, that is provided to or obtained by the
13		Director (together with any experience data, the
14		"experience materials") and any other documents,
15		materials, data and other information, including, but
16		not limited to, all working papers and copies thereof,
17		created, produced, or obtained by or disclosed to the
18		Director or any other person in connection with such
19		experience materials.
20		(b) Privilege for and Confidentiality of Confidential
21		Information.
22		(i) Except as provided in this subsection (11), a
23		company's confidential information is confidential by
24		law and privileged, and shall not be subject to the
25		Freedom of Information Act, subpoena, or discovery or
26		admissible as evidence in any private civil action;

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1		however, the Director is authorized to use the
2		confidential information in the furtherance of any
3		regulatory or legal action brought against the company
4		as a part of the Director's official duties.
5		(ii) Neither the Director nor any person who
6		received confidential information while acting under
7		the authority of the Director shall be permitted or
8		required to testify in any private civil action
9		concerning any confidential information.
10		(iii) In order to assist in the performance of the
11		Director's duties, the Director may share confidential
12		information (A) with other state, federal, and
13		international regulatory agencies and with the NAIC
14		and its affiliates and subsidiaries and (B) in the
15		case of confidential information specified in
16		subparagraphs (i) and (iv) of paragraph (a) of
17		subsection (11) only, with the Actuarial Board for
18		Counseling and Discipline or its successor upon
19		request stating that the confidential information is
20		required for the purpose of professional disciplinary
21		proceedings and with state, federal, and international
22		law enforcement officials; in the case of (A) and (B),
23		provided that such recipient agrees and has the legal
24		authority to agree, to maintain the confidentiality
25		and privileged status of such documents, materials,
26		data, and other information in the same manner and to

SB3865 Engrossed - 429 - LRB102 24242 RJF 33473 b
1		the same extent as required for the Director.
2		(iv) The Director may receive documents,
3		materials, data, and other information, including
4		otherwise confidential and privileged documents,
5		materials, data, or information, from the NAIC and its
6		affiliates and subsidiaries, from regulatory or law
7		enforcement officials of other foreign or domestic
8		jurisdictions, and from the Actuarial Board for
9		Counseling and Discipline or its successor and shall
10		maintain as confidential or privileged any document,
11		material, data, or other information received with
12		notice or the understanding that it is confidential or
13		privileged under the laws of the jurisdiction that is
14		the source of the document, material, or other
15		information.
16		(v) The Director may enter into agreements
17		governing the sharing and use of information
18		consistent with paragraph (b) of this subsection (11).
19		(vi) No waiver of any applicable privilege or
20		claim of confidentiality in the confidential
21		information shall occur as a result of disclosure to
22		the Director under this subsection (11) or as a result
23		of sharing as authorized in subparagraph (iii) of
24		paragraph (b) of this subsection (11).
25		(vii) A privilege established under the law of any
26		state or jurisdiction that is substantially similar to

SB3865 Engrossed - 430 - LRB102 24242 RJF 33473 b
1		the privilege established under paragraph (b) of this
2		subsection (11) shall be available and enforced in any
3		proceeding in and in any court of this State.
4		(viii) In this subsection (11), "regulatory
5		agency", "law enforcement agency", and "NAIC" include,
6		but are not limited to, their employees, agents,
7		consultants, and contractors.
8		(c) Notwithstanding paragraph (b) of this subsection
9		(11), any confidential information specified in
10		subparagraphs (i) and (iv) of paragraph (a) of this
11		subsection (11):
12		(i) may be subject to subpoena for the purpose of
13		defending an action seeking damages from the appointed
14		actuary submitting the related memorandum in support
15		of an opinion submitted under subsection (1) of this
16		Section or principle-based valuation report developed
17		under subparagraph (iii) of paragraph (b) of
18		subsection (9) of this Section by reason of an action
19		required by this Section or by regulations promulgated
20		under this Section;
21		(ii) may otherwise be released by the Director
22		with the written consent of the company; and
23		(iii) once any portion of a memorandum in support
24		of an opinion submitted under subsection (1) of this
25		Section or a principle-based valuation report
26		developed under subparagraph (iii) of paragraph (b) of

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1		subsection (9) of this Section is cited by the company
2		in its marketing or is publicly volunteered to or
3		before a governmental agency other than a state
4		insurance department or is released by the company to
5		the news media, all portions of such memorandum or
6		report shall no longer be confidential.
7		(12) Exemptions.
8		(a) The Director may exempt specific product forms or
9		product lines of a domestic company that is licensed and
10		doing business only in Illinois from the requirements of
11		subsection (8) of this Section, provided that:
12		(i) the Director has issued an exemption in
13		writing to the company and has not subsequently
14		revoked the exemption in writing; and
15		(ii) the company computes reserves using
16		assumptions and methods used prior to the operative
17		date of the Valuation Manual in addition to any
18		requirements established by the Director and adopted
19		by rule.
20		(b) For any company granted an exemption under this
21		subsection, subsections (1), (2), (3), (4), (5), (6), and
22		(7) shall be applicable. With respect to any company
23		applying this exemption, any reference to subsection (8)
24		found in subsections (1), (2), (3), (4), (5), (6), and (7)
25		shall not be applicable.
26		(13) Definitions. For the purposes of this Section, the

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1		following definitions shall apply beginning on the operative
2		date of the Valuation Manual:
3		"Accident and health insurance" means contracts that
4		incorporate morbidity risk and provide protection against
5		economic loss resulting from accident, sickness, or medical
6		conditions and as may be specified in the Valuation Manual.
7		"Appointed actuary" means a qualified actuary who is
8		appointed in accordance with the Valuation Manual to prepare
9		the actuarial opinion required in paragraph (b) of subsection
10		(1) of this Section.
11		"Company" means an entity that (a) has written, issued, or
12		reinsured life insurance contracts, accident and health
13		insurance contracts, or deposit-type contracts in this State
14		and has at least one such policy in force or on claim or (b)
15		has written, issued, or reinsured life insurance contracts,
16		accident and health insurance contracts, or deposit-type
17		contracts in any state and is required to hold a certificate of
18		authority to write life insurance, accident and health
19		insurance, or deposit-type contracts in this State.
20		"Deposit-type contract" means contracts that do not
21		incorporate mortality or morbidity risks and as may be
22		specified in the Valuation Manual.
23		"Life insurance" means contracts that incorporate
24		mortality risk, including annuity and pure endowment
25		contracts, and as may be specified in the Valuation Manual.
26		"NAIC" means the National Association of Insurance

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1		Commissioners.
2		"Policyholder behavior" means any action a policyholder,
3		contract holder, or any other person with the right to elect
4		options, such as a certificate holder, may take under a policy
5		or contract subject to this Section including, but not limited
6		to, lapse, withdrawal, transfer, deposit, premium payment,
7		loan, annuitization, or benefit elections prescribed by the
8		policy or contract, but excluding events of mortality or
9		morbidity that result in benefits prescribed in their
10		essential aspects by the terms of the policy or contract.
11		"Principle-based valuation" means a reserve valuation that
12		uses one or more methods or one or more assumptions determined
13		by the insurer and is required to comply with subsection (9) of
14		this Section as specified in the Valuation Manual.
15		"Qualified actuary" means an individual who is qualified
16		to sign the applicable statement of actuarial opinion in
17		accordance with the American Academy of Actuaries
18		qualification standards for actuaries signing such statements
19		and who meets the requirements specified in the Valuation
20		Manual.
21		"Tail risk" means a risk that occurs either where the
22		frequency of low probability events is higher than expected
23		under a normal probability distribution or where there are
24		observed events of very significant size or magnitude.
25		"Valuation Manual" means the manual of valuation
26		instructions adopted by the NAIC as specified in this Section

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1		or as subsequently amended.
2		(Source: P.A. 99-162, eff. 1-1-16.)
3		(215 ILCS 5/241) (from Ch. 73, par. 853)
4		Sec. 241. Trust settlements.
5		Any domestic life company shall have the power to hold the
6		proceeds of any policy issued by it under a trust or other
7		agreement upon such terms and restrictions as to revocation by
8		the policyholder and control by beneficiaries, and with such
9		exemptions from the claims of creditors of beneficiaries other
10		than the policyholder as shall have been agreed to in writing
11		by such company and the policyholder. Upon maturity of a
12		policy in the event the policyholder has made no such
13		agreement, the company shall have power to hold the proceeds
14		of the policy under an agreement with the beneficiaries. Such
15		company shall not be required to segregate funds so held but
16		may hold them as part of its general company assets. A foreign
17		or non-domestic alien company, when authorized by its charter
18		or the laws of its domicile, may exercise any such powers in
19		this State.
20		(Source: Laws 1937, p. 696.)
21		(215 ILCS 5/292.1) (from Ch. 73, par. 904.1)
22		(Section scheduled to be repealed on January 1, 2027)
23		Sec. 292.1. Amendments to Laws.
24		(a) A domestic society may amend its laws in accordance

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1		with the provisions thereof by action of its supreme governing
2		body at any regular or special meeting thereof or, if its laws
3		so provide, by referendum. Such referendum may be held in
4		accordance with the provisions of its laws by the vote of the
5		voting members of the society, by the vote of delegates or
6		representatives of voting members or by the vote of local
7		lodges. A society may provide for voting by mail. No amendment
8		submitted for adoption by referendum shall be adopted unless,
9		within 6 months from the date of submission thereof, a
10		majority of the members voting shall have signified their
11		consent to such amendment by one of the methods herein
12		specified.
13		(b) No amendment to the laws of any domestic society shall
14		take effect unless approved by the Director, who shall approve
15		such amendment if the Director finds that it has been duly
16		adopted and is not inconsistent with any requirement of the
17		laws of this State or with the character, objects and purposes
18		of the society. Unless the Director shall disapprove any such
19		amendment within 60 days after the filing of same, such
20		amendment shall be considered approved. The approval or
21		disapproval of the Director shall be in writing and mailed to
22		the society. In case the Director disapproves such amendment,
23		the reasons therefor shall be stated in such written notice.
24		(c) Within 90 days from the approval thereof by the
25		Director, all such amendments, or a synopsis thereof, shall be
26		furnished to all members of the society either by mail or by

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1		publication in full in the official publication of the
2		society. The affidavit of any officer of the society or of
3		anyone authorized by it to mail any amendments or synopsis
4		thereof, stating facts which show that same have been duly
5		addressed and mailed, shall be prima facie evidence that such
6		amendments, or a synopsis thereof, have been furnished the
7		addressee.
8		(d) Every foreign or non-domestic alien society authorized
9		to do business in this State shall file with the Director a
10		certified copy of all amendments of, or additions to, its laws
11		within 90 days after the enactment of same.
12		(e) Printed copies of the laws as amended, certified by
13		the secretary or corresponding officer of the society, shall
14		be prima facie evidence of the legal adoption thereof.
15		(Source: P.A. 84-303.)
16		(215 ILCS 5/302.1) (from Ch. 73, par. 914.1)
17		(Section scheduled to be repealed on January 1, 2027)
18		Sec. 302.1. Investments and admitted assets. A domestic
19		society shall invest its funds only in such investments as are
20		authorized by the laws of this State for the investment of
21		assets of life insurers and subject to the limitations
22		thereon. Any foreign or non-domestic alien society permitted
23		or seeking to do business in this State which invests its funds
24		in accordance with the laws of the state, district, territory,
25		country or province in which it is incorporated shall be held

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1		to meet the requirements of this Section for the investment of
2		funds. Admitted assets in addition to investments authorized
3		by this Section and Article VIII and Article VIII 1/2 of this
4		Code shall be in accordance with Section 3.1 of this Code.
5		(Source: P.A. 84-303.)
6		(215 ILCS 5/308.1) (from Ch. 73, par. 920.1)
7		(Section scheduled to be repealed on January 1, 2027)
8		Sec. 308.1. Examination of societies - adverse
9		publications.
10		(a) The Director, or any person he or she may appoint, may
11		examine any domestic, foreign or non-domestic alien society
12		transacting or applying for admission to transact business in
13		this State in the same manner as authorized for examination of
14		domestic, foreign or non-domestic alien insurance companies.
15		Requirements of notice and an opportunity to respond before
16		findings are made public as provided in the laws regulating
17		insurance companies shall also be applicable to the
18		examination of societies.
19		(b) The expense of each examination and of each valuation,
20		including compensation and actual expense of examiners, shall
21		be paid by the society examined or whose certificates are
22		valued, upon statements furnished by the Director.
23		(Source: P.A. 84-303.)
24		(215 ILCS 5/309.1) (from Ch. 73, par. 921.1)

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1		(Section scheduled to be repealed on January 1, 2027)
2		Sec. 309.1. Foreign or non-domestic alien society -
3		admission. No foreign or non-domestic alien society shall
4		transact business in this State without a certificate of
5		authority issued by the Director in accordance with Article VI
6		of this Code. Any such society desiring admission to this
7		State shall comply substantially with the requirements and
8		limitations of this amendatory Act applicable to domestic
9		societies.
10		(Source: P.A. 84-303.)
11		(215 ILCS 5/310.1) (from Ch. 73, par. 922.1)
12		(Section scheduled to be repealed on January 1, 2027)
13		Sec. 310.1. Suspension, revocation or refusal to renew
14		certificate of authority.
15		(a) Domestic Societies. When, upon investigation, the
16		Director is satisfied that any domestic society transacting
17		business under this amendatory Act has exceeded its powers or
18		has failed to comply with any provisions of this amendatory
19		Act or is conducting business fraudulently or in a way
20		hazardous to its members, creditors or the public or is not
21		carrying out its contracts in good faith, the Director shall
22		notify the society of his or her findings, stating in writing
23		the grounds of his or her dissatisfaction, and, after
24		reasonable notice, require the society on a date named to show
25		cause why its certificate of authority should not be revoked

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1		or suspended or why such society should not be fined as
2		hereinafter provided or why the Director should not proceed
3		against the society under Article XIII of this Code. If, on the
4		date named in said notice, such objections have not been
5		removed to the satisfaction of the Director or if the society
6		does not present good and sufficient reasons why its authority
7		to transact business in this State should not at that time be
8		revoked or suspended or why such society should not be fined as
9		hereinafter provided, the Director may revoke the authority of
10		the society to continue business in this State and proceed
11		against the society under Article XIII of this Code or suspend
12		such certificate of authority for any period of time up to, but
13		not to exceed, 2 years; or may by order require such society to
14		pay to the people of the State of Illinois a penalty in a sum
15		not exceeding $10,000, and, upon the failure of such society
16		to pay such penalty within 20 days after the mailing of such
17		order, postage prepaid, registered and addressed to the last
18		known place of business of such society, unless such order is
19		stayed by an order of a court of competent jurisdiction, the
20		Director may revoke or suspend the license of such society for
21		any period of time up to, but not exceeding, a period of 2
22		years.
23		(b) Foreign or non-domestic alien societies. The Director
24		shall suspend, revoke or refuse to renew certificates of
25		authority in accordance with Article VI of this Code.
26		(Source: P.A. 93-32, eff. 7-1-03.)

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1		(215 ILCS 5/357.29) (from Ch. 73, par. 969.29)
2		Sec. 357.29. Any policy of a foreign or non-domestic alien
3		company, when delivered or issued for delivery to any person
4		in this State, may contain any provision which is not less
5		favorable to the insured or the beneficiary than the
6		provisions of this article and which is prescribed or required
7		by the law of the state under which the company is organized.
8		Any policy of a domestic company may, when issued for
9		delivery in any other state or country, contain any provision
10		permitted or required by the laws of such other state or
11		country.
12		(Source: Laws 1967, p. 1735.)
13		(215 ILCS 5/370) (from Ch. 73, par. 982)
14		Sec. 370. Policies issued in violation of article-Penalty.
15		(1) Any company, or any officer or agent thereof, issuing
16		or delivering to any person in this State any policy in wilful
17		violation of the provision of this article shall be guilty of a
18		petty offense.
19		(2) The Director may revoke the license of any foreign or
20		non-domestic alien company, or of the agent thereof wilfully
21		violating any provision of this article or suspend such
22		license for any period of time up to, but not to exceed, two
23		years; or may by order require such insurance company or agent
24		to pay to the people of the State of Illinois a penalty in a

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1		sum not exceeding $1,000, and upon the failure of such
2		insurance company or agent to pay such penalty within twenty
3		days after the mailing of such order, postage prepaid,
4		registered, and addressed to the last known place of business
5		of such insurance company or agent, unless such order is
6		stayed by an order of a court of competent jurisdiction, the
7		Director of Insurance may revoke or suspend the license of
8		such insurance company or agent for any period of time up to,
9		but not exceeding a period of, two years.
10		(Source: P.A. 93-32, eff. 7-1-03.)
11		(215 ILCS 5/404) (from Ch. 73, par. 1016)
12		Sec. 404. Office of Director; a public office; destruction
13		or disposal of records, papers, documents, and memoranda.
14		(1)(a) The office of the Director shall be a public office
15		and the records, books, and papers thereof on file therein,
16		except those records or documents containing or disclosing any
17		analysis, opinion, calculation, ratio, recommendation, advice,
18		viewpoint, or estimation by any Department staff regarding the
19		financial or market condition of an insurer not otherwise made
20		part of the public record by the Director, shall be accessible
21		to the inspection of the public, except as the Director, for
22		good reason, may decide otherwise, or except as may be
23		otherwise provided in this Code or as otherwise provided in
24		Section 7 of the Freedom of Information Act.
25		(b) Except where another provision of this Code expressly

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1		prohibits a disclosure of confidential information to the
2		specific officials or organizations described in this
3		subsection, the Director may disclose or share any
4		confidential records or information in his custody and control
5		with any insurance regulatory officials of any state or
6		country, with the law enforcement officials of this State, any
7		other state, or the federal government, or with the National
8		Association of Insurance Commissioners, upon the written
9		agreement of the official or organization receiving the
10		information to hold the information or records confidential
11		and in a manner consistent with this Code.
12		(c) The Director shall maintain as confidential any
13		records or information received from the National Association
14		of Insurance Commissioners or insurance regulatory officials
15		of other states which is confidential in that other
16		jurisdiction.
17		(2) Upon the filing of the examination to which they
18		relate, the Director is authorized to destroy or otherwise
19		dispose of all working papers relative to any company which
20		has been examined at any time prior to that last examination by
21		the Department, so that in such circumstances only current
22		working papers of that last examination may be retained by the
23		Department.
24		(3) Five years after the conclusion of the transactions to
25		which they relate, the Director is authorized to destroy or
26		otherwise dispose of all books, records, papers, memoranda and

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1		correspondence directly related to consumer complaints or
2		inquiries.
3		(4) Two years after the conclusion of the transactions to
4		which they relate, the Director is authorized to destroy or
5		otherwise dispose of all books, records, papers, memoranda,
6		and correspondence directly related to all void, obsolete, or
7		superseded rate filings and schedules required to be filed by
8		statute; and all individual company rating experience data and
9		all records, papers, documents and memoranda in the possession
10		of the Director relating thereto.
11		(5) Five years after the conclusion of the transactions to
12		which they relate, the Director is authorized to destroy or
13		otherwise dispose of all examination reports of companies made
14		by the insurance supervisory officials of states other than
15		Illinois; applications, requisitions, and requests for
16		licenses; all records of hearings; and all similar records,
17		papers, documents, and memoranda in the possession of the
18		Director.
19		(6) Ten years after the conclusion of the transactions to
20		which they relate, the Director is authorized to destroy or
21		otherwise dispose of all official correspondence of foreign
22		and non-domestic alien companies, all foreign companies' and
23		non-domestic alien companies' annual statements, valuation
24		reports, tax reports, and all similar records, papers,
25		documents and memoranda in the possession of the Director.
26		(7) Whenever any records, papers, documents or memoranda

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1		are destroyed or otherwise disposed of pursuant to the
2		provisions of this section, the Director shall execute and
3		file in a separate, permanent office file a certificate
4		listing and setting forth by summary description the records,
5		papers, documents or memoranda so destroyed or otherwise
6		disposed of, and the Director may, in his discretion, preserve
7		copies of any such records, papers, documents or memoranda by
8		means of microfilming or photographing the same.
9		(8) This Section shall apply to records, papers,
10		documents, and memoranda presently in the possession of the
11		Director as well as to records, papers, documents, and
12		memoranda hereafter coming into his possession.
13		(Source: P.A. 97-1004, eff. 8-17-12.)
14		(215 ILCS 5/408) (from Ch. 73, par. 1020)
15		Sec. 408. Fees and charges.
16		(1) The Director shall charge, collect and give proper
17		acquittances for the payment of the following fees and
18		charges:
19		(a) For filing all documents submitted for the
20		incorporation or organization or certification of a
21		domestic company, except for a fraternal benefit society,
22		$2,000.
23		(b) For filing all documents submitted for the
24		incorporation or organization of a fraternal benefit
25		society, $500.

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1		(c) For filing amendments to articles of incorporation
2		and amendments to declaration of organization, except for
3		a fraternal benefit society, a mutual benefit association,
4		a burial society or a farm mutual, $200.
5		(d) For filing amendments to articles of incorporation
6		of a fraternal benefit society, a mutual benefit
7		association or a burial society, $100.
8		(e) For filing amendments to articles of incorporation
9		of a farm mutual, $50.
10		(f) For filing bylaws or amendments thereto, $50.
11		(g) For filing agreement of merger or consolidation:
12		(i) for a domestic company, except for a fraternal
13		benefit society, a mutual benefit association, a
14		burial society, or a farm mutual, $2,000.
15		(ii) for a foreign or non-domestic alien company,
16		except for a fraternal benefit society, $600.
17		(iii) for a fraternal benefit society, a mutual
18		benefit association, a burial society, or a farm
19		mutual, $200.
20		(h) For filing agreements of reinsurance by a domestic
21		company, $200.
22		(i) For filing all documents submitted by a foreign or
23		non-domestic alien company to be admitted to transact
24		business or accredited as a reinsurer in this State,
25		except for a fraternal benefit society, $5,000.
26		(j) For filing all documents submitted by a foreign or

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1		non-domestic alien fraternal benefit society to be
2		admitted to transact business in this State, $500.
3		(k) For filing declaration of withdrawal of a foreign
4		or non-domestic alien company, $50.
5		(l) For filing annual statement by a domestic company,
6		except a fraternal benefit society, a mutual benefit
7		association, a burial society, or a farm mutual, $200.
8		(m) For filing annual statement by a domestic
9		fraternal benefit society, $100.
10		(n) For filing annual statement by a farm mutual, a
11		mutual benefit association, or a burial society, $50.
12		(o) For issuing a certificate of authority or renewal
13		thereof except to a foreign fraternal benefit society,
14		$400.
15		(p) For issuing a certificate of authority or renewal
16		thereof to a foreign fraternal benefit society, $200.
17		(q) For issuing an amended certificate of authority,
18		$50.
19		(r) For each certified copy of certificate of
20		authority, $20.
21		(s) For each certificate of deposit, or valuation, or
22		compliance or surety certificate, $20.
23		(t) For copies of papers or records per page, $1.
24		(u) For each certification to copies of papers or
25		records, $10.
26		(v) For multiple copies of documents or certificates

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1		listed in subparagraphs (r), (s), and (u) of paragraph (1)
2		of this Section, $10 for the first copy of a certificate of
3		any type and $5 for each additional copy of the same
4		certificate requested at the same time, unless, pursuant
5		to paragraph (2) of this Section, the Director finds these
6		additional fees excessive.
7		(w) For issuing a permit to sell shares or increase
8		paid-up capital:
9		(i) in connection with a public stock offering,
10		$300;
11		(ii) in any other case, $100.
12		(x) For issuing any other certificate required or
13		permissible under the law, $50.
14		(y) For filing a plan of exchange of the stock of a
15		domestic stock insurance company, a plan of
16		demutualization of a domestic mutual company, or a plan of
17		reorganization under Article XII, $2,000.
18		(z) For filing a statement of acquisition of a
19		domestic company as defined in Section 131.4 of this Code,
20		$2,000.
21		(aa) For filing an agreement to purchase the business
22		of an organization authorized under the Dental Service
23		Plan Act or the Voluntary Health Services Plans Act or of a
24		health maintenance organization or a limited health
25		service organization, $2,000.
26		(bb) For filing a statement of acquisition of a

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1		foreign or non-domestic alien insurance company as defined
2		in Section 131.12a of this Code, $1,000.
3		(cc) For filing a registration statement as required
4		in Sections 131.13 and 131.14, the notification as
5		required by Sections 131.16, 131.20a, or 141.4, or an
6		agreement or transaction required by Sections 124.2(2),
7		141, 141a, or 141.1, $200.
8		(dd) For filing an application for licensing of:
9		(i) a religious or charitable risk pooling trust
10		or a workers' compensation pool, $1,000;
11		(ii) a workers' compensation service company,
12		$500;
13		(iii) a self-insured automobile fleet, $200; or
14		(iv) a renewal of or amendment of any license
15		issued pursuant to (i), (ii), or (iii) above, $100.
16		(ee) For filing articles of incorporation for a
17		syndicate to engage in the business of insurance through
18		the Illinois Insurance Exchange, $2,000.
19		(ff) For filing amended articles of incorporation for
20		a syndicate engaged in the business of insurance through
21		the Illinois Insurance Exchange, $100.
22		(gg) For filing articles of incorporation for a
23		limited syndicate to join with other subscribers or
24		limited syndicates to do business through the Illinois
25		Insurance Exchange, $1,000.
26		(hh) For filing amended articles of incorporation for

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1		a limited syndicate to do business through the Illinois
2		Insurance Exchange, $100.
3		(ii) For a permit to solicit subscriptions to a
4		syndicate or limited syndicate, $100.
5		(jj) For the filing of each form as required in
6		Section 143 of this Code, $50 per form. The fee for
7		advisory and rating organizations shall be $200 per form.
8		(i) For the purposes of the form filing fee,
9		filings made on insert page basis will be considered
10		one form at the time of its original submission.
11		Changes made to a form subsequent to its approval
12		shall be considered a new filing.
13		(ii) Only one fee shall be charged for a form,
14		regardless of the number of other forms or policies
15		with which it will be used.
16		(iii) Fees charged for a policy filed as it will be
17		issued regardless of the number of forms comprising
18		that policy shall not exceed $1,500. For advisory or
19		rating organizations, fees charged for a policy filed
20		as it will be issued regardless of the number of forms
21		comprising that policy shall not exceed $2,500.
22		(iv) The Director may by rule exempt forms from
23		such fees.
24		(kk) For filing an application for licensing of a
25		reinsurance intermediary, $500.
26		(ll) For filing an application for renewal of a

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1		license of a reinsurance intermediary, $200.
2		(2) When printed copies or numerous copies of the same
3		paper or records are furnished or certified, the Director may
4		reduce such fees for copies if he finds them excessive. He may,
5		when he considers it in the public interest, furnish without
6		charge to state insurance departments and persons other than
7		companies, copies or certified copies of reports of
8		examinations and of other papers and records.
9		(3) The expenses incurred in any performance examination
10		authorized by law shall be paid by the company or person being
11		examined. The charge shall be reasonably related to the cost
12		of the examination including but not limited to compensation
13		of examiners, electronic data processing costs, supervision
14		and preparation of an examination report and lodging and
15		travel expenses. All lodging and travel expenses shall be in
16		accord with the applicable travel regulations as published by
17		the Department of Central Management Services and approved by
18		the Governor's Travel Control Board, except that out-of-state
19		lodging and travel expenses related to examinations authorized
20		under Section 132 shall be in accordance with travel rates
21		prescribed under paragraph 301-7.2 of the Federal Travel
22		Regulations, 41 C.F.R. 301-7.2, for reimbursement of
23		subsistence expenses incurred during official travel. All
24		lodging and travel expenses may be reimbursed directly upon
25		authorization of the Director. With the exception of the
26		direct reimbursements authorized by the Director, all

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1		performance examination charges collected by the Department
2		shall be paid to the Insurance Producer Administration Fund,
3		however, the electronic data processing costs incurred by the
4		Department in the performance of any examination shall be
5		billed directly to the company being examined for payment to
6		the Technology Management Revolving Fund.
7		(4) At the time of any service of process on the Director
8		as attorney for such service, the Director shall charge and
9		collect the sum of $20, which may be recovered as taxable costs
10		by the party to the suit or action causing such service to be
11		made if he prevails in such suit or action.
12		(5) (a) The costs incurred by the Department of Insurance
13		in conducting any hearing authorized by law shall be assessed
14		against the parties to the hearing in such proportion as the
15		Director of Insurance may determine upon consideration of all
16		relevant circumstances including: (1) the nature of the
17		hearing; (2) whether the hearing was instigated by, or for the
18		benefit of a particular party or parties; (3) whether there is
19		a successful party on the merits of the proceeding; and (4) the
20		relative levels of participation by the parties.
21		(b) For purposes of this subsection (5) costs incurred
22		shall mean the hearing officer fees, court reporter fees, and
23		travel expenses of Department of Insurance officers and
24		employees; provided however, that costs incurred shall not
25		include hearing officer fees or court reporter fees unless the
26		Department has retained the services of independent

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1		contractors or outside experts to perform such functions.
2		(c) The Director shall make the assessment of costs
3		incurred as part of the final order or decision arising out of
4		the proceeding; provided, however, that such order or decision
5		shall include findings and conclusions in support of the
6		assessment of costs. This subsection (5) shall not be
7		construed as permitting the payment of travel expenses unless
8		calculated in accordance with the applicable travel
9		regulations of the Department of Central Management Services,
10		as approved by the Governor's Travel Control Board. The
11		Director as part of such order or decision shall require all
12		assessments for hearing officer fees and court reporter fees,
13		if any, to be paid directly to the hearing officer or court
14		reporter by the party(s) assessed for such costs. The
15		assessments for travel expenses of Department officers and
16		employees shall be reimbursable to the Director of Insurance
17		for deposit to the fund out of which those expenses had been
18		paid.
19		(d) The provisions of this subsection (5) shall apply in
20		the case of any hearing conducted by the Director of Insurance
21		not otherwise specifically provided for by law.
22		(6) The Director shall charge and collect an annual
23		financial regulation fee from every domestic company for
24		examination and analysis of its financial condition and to
25		fund the internal costs and expenses of the Interstate
26		Insurance Receivership Commission as may be allocated to the

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1		State of Illinois and companies doing an insurance business in
2		this State pursuant to Article X of the Interstate Insurance
3		Receivership Compact. The fee shall be the greater fixed
4		amount based upon the combination of nationwide direct premium
5		income and nationwide reinsurance assumed premium income or
6		upon admitted assets calculated under this subsection as
7		follows:
8		(a) Combination of nationwide direct premium income
9		and nationwide reinsurance assumed premium.
10		(i) $150, if the premium is less than $500,000 and
11		there is no reinsurance assumed premium;
12		(ii) $750, if the premium is $500,000 or more, but
13		less than $5,000,000 and there is no reinsurance
14		assumed premium; or if the premium is less than
15		$5,000,000 and the reinsurance assumed premium is less
16		than $10,000,000;
17		(iii) $3,750, if the premium is less than
18		$5,000,000 and the reinsurance assumed premium is
19		$10,000,000 or more;
20		(iv) $7,500, if the premium is $5,000,000 or more,
21		but less than $10,000,000;
22		(v) $18,000, if the premium is $10,000,000 or
23		more, but less than $25,000,000;
24		(vi) $22,500, if the premium is $25,000,000 or
25		more, but less than $50,000,000;
26		(vii) $30,000, if the premium is $50,000,000 or

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1		more, but less than $100,000,000;
2		(viii) $37,500, if the premium is $100,000,000 or
3		more.
4		(b) Admitted assets.
5		(i) $150, if admitted assets are less than
6		$1,000,000;
7		(ii) $750, if admitted assets are $1,000,000 or
8		more, but less than $5,000,000;
9		(iii) $3,750, if admitted assets are $5,000,000 or
10		more, but less than $25,000,000;
11		(iv) $7,500, if admitted assets are $25,000,000 or
12		more, but less than $50,000,000;
13		(v) $18,000, if admitted assets are $50,000,000 or
14		more, but less than $100,000,000;
15		(vi) $22,500, if admitted assets are $100,000,000
16		or more, but less than $500,000,000;
17		(vii) $30,000, if admitted assets are $500,000,000
18		or more, but less than $1,000,000,000;
19		(viii) $37,500, if admitted assets are
20		$1,000,000,000 or more.
21		(c) The sum of financial regulation fees charged to
22		the domestic companies of the same affiliated group shall
23		not exceed $250,000 in the aggregate in any single year
24		and shall be billed by the Director to the member company
25		designated by the group.
26		(7) The Director shall charge and collect an annual

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1		financial regulation fee from every foreign or non-domestic
2		alien company, except fraternal benefit societies, for the
3		examination and analysis of its financial condition and to
4		fund the internal costs and expenses of the Interstate
5		Insurance Receivership Commission as may be allocated to the
6		State of Illinois and companies doing an insurance business in
7		this State pursuant to Article X of the Interstate Insurance
8		Receivership Compact. The fee shall be a fixed amount based
9		upon Illinois direct premium income and nationwide reinsurance
10		assumed premium income in accordance with the following
11		schedule:
12		(a) $150, if the premium is less than $500,000 and
13		there is no reinsurance assumed premium;
14		(b) $750, if the premium is $500,000 or more, but less
15		than $5,000,000 and there is no reinsurance assumed
16		premium; or if the premium is less than $5,000,000 and the
17		reinsurance assumed premium is less than $10,000,000;
18		(c) $3,750, if the premium is less than $5,000,000 and
19		the reinsurance assumed premium is $10,000,000 or more;
20		(d) $7,500, if the premium is $5,000,000 or more, but
21		less than $10,000,000;
22		(e) $18,000, if the premium is $10,000,000 or more,
23		but less than $25,000,000;
24		(f) $22,500, if the premium is $25,000,000 or more,
25		but less than $50,000,000;
26		(g) $30,000, if the premium is $50,000,000 or more,

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1		but less than $100,000,000;
2		(h) $37,500, if the premium is $100,000,000 or more.
3		The sum of financial regulation fees under this subsection
4		(7) charged to the foreign or non-domestic alien companies
5		within the same affiliated group shall not exceed $250,000 in
6		the aggregate in any single year and shall be billed by the
7		Director to the member company designated by the group.
8		(8) Beginning January 1, 1992, the financial regulation
9		fees imposed under subsections (6) and (7) of this Section
10		shall be paid by each company or domestic affiliated group
11		annually. After January 1, 1994, the fee shall be billed by
12		Department invoice based upon the company's premium income or
13		admitted assets as shown in its annual statement for the
14		preceding calendar year. The invoice is due upon receipt and
15		must be paid no later than June 30 of each calendar year. All
16		financial regulation fees collected by the Department shall be
17		paid to the Insurance Financial Regulation Fund. The
18		Department may not collect financial examiner per diem charges
19		from companies subject to subsections (6) and (7) of this
20		Section undergoing financial examination after June 30, 1992.
21		(9) In addition to the financial regulation fee required
22		by this Section, a company undergoing any financial
23		examination authorized by law shall pay the following costs
24		and expenses incurred by the Department: electronic data
25		processing costs, the expenses authorized under Section 131.21
26		and subsection (d) of Section 132.4 of this Code, and lodging

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1		and travel expenses.
2		Electronic data processing costs incurred by the
3		Department in the performance of any examination shall be
4		billed directly to the company undergoing examination for
5		payment to the Technology Management Revolving Fund. Except
6		for direct reimbursements authorized by the Director or direct
7		payments made under Section 131.21 or subsection (d) of
8		Section 132.4 of this Code, all financial regulation fees and
9		all financial examination charges collected by the Department
10		shall be paid to the Insurance Financial Regulation Fund.
11		All lodging and travel expenses shall be in accordance
12		with applicable travel regulations published by the Department
13		of Central Management Services and approved by the Governor's
14		Travel Control Board, except that out-of-state lodging and
15		travel expenses related to examinations authorized under
16		Sections 132.1 through 132.7 shall be in accordance with
17		travel rates prescribed under paragraph 301-7.2 of the Federal
18		Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
19		subsistence expenses incurred during official travel. All
20		lodging and travel expenses may be reimbursed directly upon
21		the authorization of the Director.
22		In the case of an organization or person not subject to the
23		financial regulation fee, the expenses incurred in any
24		financial examination authorized by law shall be paid by the
25		organization or person being examined. The charge shall be
26		reasonably related to the cost of the examination including,

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1		but not limited to, compensation of examiners and other costs
2		described in this subsection.
3		(10) Any company, person, or entity failing to make any
4		payment of $150 or more as required under this Section shall be
5		subject to the penalty and interest provisions provided for in
6		subsections (4) and (7) of Section 412.
7		(11) Unless otherwise specified, all of the fees collected
8		under this Section shall be paid into the Insurance Financial
9		Regulation Fund.
10		(12) For purposes of this Section:
11		(a) "Domestic company" means a company as defined in
12		Section 2 of this Code which is incorporated or organized
13		under the laws of this State, and in addition includes a
14		not-for-profit corporation authorized under the Dental
15		Service Plan Act or the Voluntary Health Services Plans
16		Act, a health maintenance organization, and a limited
17		health service organization.
18		(b) "Foreign company" means a company as defined in
19		Section 2 of this Code which is incorporated or organized
20		under the laws of any state of the United States other than
21		this State and in addition includes a health maintenance
22		organization and a limited health service organization
23		which is incorporated or organized under the laws of any
24		state of the United States other than this State.
25		(c) "Non-domestic Alien company" means a company as
26		defined in Section 2 of this Code which is incorporated or

SB3865 Engrossed - 459 - LRB102 24242 RJF 33473 b
1		organized under the laws of any country other than the
2		United States.
3		(d) "Fraternal benefit society" means a corporation,
4		society, order, lodge or voluntary association as defined
5		in Section 282.1 of this Code.
6		(e) "Mutual benefit association" means a company,
7		association or corporation authorized by the Director to
8		do business in this State under the provisions of Article
9		XVIII of this Code.
10		(f) "Burial society" means a person, firm,
11		corporation, society or association of individuals
12		authorized by the Director to do business in this State
13		under the provisions of Article XIX of this Code.
14		(g) "Farm mutual" means a district, county and
15		township mutual insurance company authorized by the
16		Director to do business in this State under the provisions
17		of the Farm Mutual Insurance Company Act of 1986.
18		(Source: P.A. 100-23, eff. 7-6-17.)
19		(215 ILCS 5/412) (from Ch. 73, par. 1024)
20		Sec. 412. Refunds; penalties; collection.
21		(1)(a) Whenever it appears to the satisfaction of the
22		Director that because of some mistake of fact, error in
23		calculation, or erroneous interpretation of a statute of this
24		or any other state, any authorized company, surplus line
25		producer, or industrial insured has paid to him, pursuant to

SB3865 Engrossed - 460 - LRB102 24242 RJF 33473 b
1		any provision of law, taxes, fees, or other charges in excess
2		of the amount legally chargeable against it, during the 6 year
3		period immediately preceding the discovery of such
4		overpayment, he shall have power to refund to such company,
5		surplus line producer, or industrial insured the amount of the
6		excess or excesses by applying the amount or amounts thereof
7		toward the payment of taxes, fees, or other charges already
8		due, or which may thereafter become due from that company
9		until such excess or excesses have been fully refunded, or
10		upon a written request from the authorized company, surplus
11		line producer, or industrial insured, the Director shall
12		provide a cash refund within 120 days after receipt of the
13		written request if all necessary information has been filed
14		with the Department in order for it to perform an audit of the
15		tax report for the transaction or period or annual return for
16		the year in which the overpayment occurred or within 120 days
17		after the date the Department receives all the necessary
18		information to perform such audit. The Director shall not
19		provide a cash refund if there are insufficient funds in the
20		Insurance Premium Tax Refund Fund to provide a cash refund, if
21		the amount of the overpayment is less than $100, or if the
22		amount of the overpayment can be fully offset against the
23		taxpayer's estimated liability for the year following the year
24		of the cash refund request. Any cash refund shall be paid from
25		the Insurance Premium Tax Refund Fund, a special fund hereby
26		created in the State treasury.

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1		(b) Beginning January 1, 2000 and thereafter, the
2		Department shall deposit a percentage of the amounts collected
3		under Sections 409, 444, and 444.1 of this Code into the
4		Insurance Premium Tax Refund Fund. The percentage deposited
5		into the Insurance Premium Tax Refund Fund shall be the annual
6		percentage. The annual percentage shall be calculated as a
7		fraction, the numerator of which shall be the amount of cash
8		refunds approved by the Director for payment and paid during
9		the preceding calendar year as a result of overpayment of tax
10		liability under Sections 121-2.08, 409, 444, 444.1, and 445 of
11		this Code and the denominator of which shall be the amounts
12		collected pursuant to Sections 121-2.08, 409, 444, 444.1, and
13		445 of this Code during the preceding calendar year. However,
14		if there were no cash refunds paid in a preceding calendar
15		year, the Department shall deposit 5% of the amount collected
16		in that preceding calendar year pursuant to Sections 121-2.08,
17		409, 444, 444.1, and 445 of this Code into the Insurance
18		Premium Tax Refund Fund instead of an amount calculated by
19		using the annual percentage.
20		(c) Beginning July 1, 1999, moneys in the Insurance
21		Premium Tax Refund Fund shall be expended exclusively for the
22		purpose of paying cash refunds resulting from overpayment of
23		tax liability under Sections 121-2.08, 409, 444, 444.1, and
24		445 of this Code as determined by the Director pursuant to
25		subsection 1(a) of this Section. Cash refunds made in
26		accordance with this Section may be made from the Insurance

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1		Premium Tax Refund Fund only to the extent that amounts have
2		been deposited and retained in the Insurance Premium Tax
3		Refund Fund.
4		(d) This Section shall constitute an irrevocable and
5		continuing appropriation from the Insurance Premium Tax Refund
6		Fund for the purpose of paying cash refunds pursuant to the
7		provisions of this Section.
8		(2)(a) When any insurance company fails to file any tax
9		return required under Sections 408.1, 409, 444, and 444.1 of
10		this Code or Section 12 of the Fire Investigation Act on the
11		date prescribed, including any extensions, there shall be
12		added as a penalty $400 or 10% of the amount of such tax,
13		whichever is greater, for each month or part of a month of
14		failure to file, the entire penalty not to exceed $2,000 or 50%
15		of the tax due, whichever is greater.
16		(b) When any industrial insured or surplus line producer
17		fails to file any tax return or report required under Sections
18		121-2.08 and 445 of this Code or Section 12 of the Fire
19		Investigation Act on the date prescribed, including any
20		extensions, there shall be added:
21		(i) as a late fee, if the return or report is received
22		at least one day but not more than 7 days after the
23		prescribed due date, $400 or 10% of the tax due, whichever
24		is greater, the entire fee not to exceed $1,000;
25		(ii) as a late fee, if the return or report is received
26		at least 8 days but not more than 14 days after the

SB3865 Engrossed - 463 - LRB102 24242 RJF 33473 b
1		prescribed due date, $400 or 10% of the tax due, whichever
2		is greater, the entire fee not to exceed $1,500;
3		(iii) as a late fee, if the return or report is
4		received at least 15 days but not more than 21 days after
5		the prescribed due date, $400 or 10% of the tax due,
6		whichever is greater, the entire fee not to exceed $2,000;
7		or
8		(iv) as a penalty, if the return or report is received
9		more than 21 days after the prescribed due date, $400 or
10		10% of the tax due, whichever is greater, for each month or
11		part of a month of failure to file, the entire penalty not
12		to exceed $2,000 or 50% of the tax due, whichever is
13		greater.
14		A tax return or report shall be deemed received as of the
15		date mailed as evidenced by a postmark, proof of mailing on a
16		recognized United States Postal Service form or a form
17		acceptable to the United States Postal Service or other
18		commercial mail delivery service, or other evidence acceptable
19		to the Director.
20		(3)(a) When any insurance company fails to pay the full
21		amount due under the provisions of this Section, Sections
22		408.1, 409, 444, or 444.1 of this Code, or Section 12 of the
23		Fire Investigation Act, there shall be added to the amount due
24		as a penalty an amount equal to 10% of the deficiency.
25		(a-5) When any industrial insured or surplus line producer
26		fails to pay the full amount due under the provisions of this

SB3865 Engrossed - 464 - LRB102 24242 RJF 33473 b
1		Section, Sections 121-2.08 or 445 of this Code, or Section 12
2		of the Fire Investigation Act on the date prescribed, there
3		shall be added:
4		(i) as a late fee, if the payment is received at least
5		one day but not more than 7 days after the prescribed due
6		date, 10% of the tax due, the entire fee not to exceed
7		$1,000;
8		(ii) as a late fee, if the payment is received at least
9		8 days but not more than 14 days after the prescribed due
10		date, 10% of the tax due, the entire fee not to exceed
11		$1,500;
12		(iii) as a late fee, if the payment is received at
13		least 15 days but not more than 21 days after the
14		prescribed due date, 10% of the tax due, the entire fee not
15		to exceed $2,000; or
16		(iv) as a penalty, if the return or report is received
17		more than 21 days after the prescribed due date, 10% of the
18		tax due.
19		A tax payment shall be deemed received as of the date
20		mailed as evidenced by a postmark, proof of mailing on a
21		recognized United States Postal Service form or a form
22		acceptable to the United States Postal Service or other
23		commercial mail delivery service, or other evidence acceptable
24		to the Director.
25		(b) If such failure to pay is determined by the Director to
26		be wilful, after a hearing under Sections 402 and 403, there

SB3865 Engrossed - 465 - LRB102 24242 RJF 33473 b
1		shall be added to the tax as a penalty an amount equal to the
2		greater of 50% of the deficiency or 10% of the amount due and
3		unpaid for each month or part of a month that the deficiency
4		remains unpaid commencing with the date that the amount
5		becomes due. Such amount shall be in lieu of any determined
6		under paragraph (a) or (a-5).
7		(4) Any insurance company, industrial insured, or surplus
8		line producer that fails to pay the full amount due under this
9		Section or Sections 121-2.08, 408.1, 409, 444, 444.1, or 445
10		of this Code, or Section 12 of the Fire Investigation Act is
11		liable, in addition to the tax and any late fees and penalties,
12		for interest on such deficiency at the rate of 12% per annum,
13		or at such higher adjusted rates as are or may be established
14		under subsection (b) of Section 6621 of the Internal Revenue
15		Code, from the date that payment of any such tax was due,
16		determined without regard to any extensions, to the date of
17		payment of such amount.
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.
24		(6) In the event that the certificate of authority of a
25		foreign or non-domestic alien company is revoked for any cause
26		or the company withdraws from this State prior to the renewal

SB3865 Engrossed - 466 - LRB102 24242 RJF 33473 b
1		date of the certificate of authority as provided in Section
2		114, the company may recover the amount of any such tax paid in
3		advance. Except as provided in this subsection, no revocation
4		or withdrawal excuses payment of or constitutes grounds for
5		the recovery of any taxes or penalties imposed by this Code.
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.
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
19		of the company or person acquired after receipt of the
20		assessment, issuance of the order, or filing of the return.
21		The company or person is liable for the filing fee incurred by
22		the Department for filing the lien and the filing fee incurred
23		by the Department to file the release of that lien. The filing
24		fees shall be paid to the Department in addition to payment of
25		the tax, fee, charge, fine, penalty, interest, other charges,
26		or 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.
12		The 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
16		company or person, within 5 days after the notice (or within
17		such extension of time as the Department may grant), does not
18		comply with the notice or show to the Department that the
19		findings in the notice are erroneous, the Department may file
20		a notice of jeopardy assessment lien in the office of the
21		recorder of the county in which any property of the company or
22		person may be located and shall notify the company or person of
23		the filing. The jeopardy assessment lien shall have the same
24		scope and effect as the statutory lien provided for in this
25		Section. If the company or person believes that the company or
26		person does not owe some or all of the tax for which the

SB3865 Engrossed - 469 - LRB102 24242 RJF 33473 b
1		jeopardy assessment lien against the company or person has
2		been filed, or that no jeopardy to the revenue in fact exists,
3		the company or person may protest within 20 days after being
4		notified by the Department of the filing of the jeopardy
5		assessment lien and request a hearing, whereupon the
6		Department shall hold a hearing in conformity with the
7		provisions of this Code and, pursuant thereto, shall notify
8		the company or person of its findings as to whether or not the
9		jeopardy assessment lien will be released. If not, and if the
10		company or person is aggrieved by this decision, the company
11		or person may file an action for judicial review of the final
12		determination of the Department in accordance with the
13		Administrative Review Law. If, pursuant to such hearing (or
14		after an independent determination of the facts by the
15		Department without a hearing), the Department determines that
16		some or all of the amount due covered by the jeopardy
17		assessment lien is not owed by the company or person, or that
18		no jeopardy to the revenue exists, or if on judicial review the
19		final judgment of the court is that the company or person does
20		not owe some or all of the amount due covered by the jeopardy
21		assessment lien against them, or that no jeopardy to the
22		revenue exists, the Department shall release its jeopardy
23		assessment lien to the extent of such finding of nonliability
24		for the amount, or to the extent of such finding of no jeopardy
25		to the revenue. The Department shall also release its jeopardy
26		assessment lien against the company or person whenever the

SB3865 Engrossed - 470 - LRB102 24242 RJF 33473 b
1		amount due and owing covered by the lien, plus any interest
2		which may be due, are paid and the company or person has paid
3		the Department in cash or by guaranteed remittance an amount
4		representing the filing fee for the lien and the filing fee for
5		the release of that lien. The Department shall file that
6		release of lien with the recorder of the county where that lien
7		was filed.
8		Nothing in this Section shall be construed to give the
9		Department a preference over the rights of any bona fide
10		purchaser, holder of a security interest, mechanics
11		lienholder, mortgagee, or judgment lien creditor arising prior
12		to the filing of a regular notice of lien or a notice of
13		jeopardy assessment lien in the office of the recorder in the
14		county in which the property subject to the lien is located.
15		For purposes of this Section, "bona fide" shall not include
16		any mortgage of real or personal property or any other credit
17		transaction that results in the mortgagee or the holder of the
18		security acting as trustee for unsecured creditors of the
19		company or person mentioned in the notice of lien who executed
20		such chattel or real property mortgage or the document
21		evidencing such credit transaction. The lien shall be inferior
22		to the lien of general taxes, special assessments, and special
23		taxes levied by any political subdivision of this State. In
24		case title to land to be affected by the notice of lien or
25		notice of jeopardy assessment lien is registered under the
26		provisions of the Registered Titles (Torrens) Act, such notice

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1		shall be filed in the office of the Registrar of Titles of the
2		county within which the property subject to the lien is
3		situated and shall be entered upon the register of titles as a
4		memorial or charge upon each folium of the register of titles
5		affected by such notice, and the Department shall not have a
6		preference over the rights of any bona fide purchaser,
7		mortgagee, judgment creditor, or other lienholder arising
8		prior to the registration of such notice. The regular lien or
9		jeopardy assessment lien shall not be effective against any
10		purchaser with respect to any item in a retailer's stock in
11		trade purchased from the retailer in the usual course of the
12		retailer's business.
13		(Source: P.A. 98-158, eff. 8-2-13; 98-978, eff. 1-1-15.)
14		(215 ILCS 5/413) (from Ch. 73, par. 1025)
15		Sec. 413. Privilege Tax Payable on Admission of Foreign or
16		Non-domestic Alien Company.
17		(1) Every foreign or non-domestic alien company applying
18		for a certificate of authority to transact business in this
19		State shall pay to the Director a tax for the privilege of
20		transacting business in this State in accordance with Section
21		409.
22		(2) If during all or any part of the 3 year period next
23		preceding the date of application for a certificate of
24		authority the company had a certificate of authority to
25		transact business in this State, or if it survives or was

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1		formed by a merger, consolidation, reorganization or
2		reincorporation, and one or more of the parties thereto was a
3		foreign or non-domestic alien company authorized to transact
4		business in this State during all or any part of such 3 year
5		period, then the tax shall be determined in accordance with
6		Section 409 on the basis of the last entire calendar year
7		during which the company or any one of the foreign or
8		non-domestic alien companies parties to the merger,
9		consolidation, reorganization or reincorporation was
10		authorized to transact business in this State, or if none was
11		authorized during any entire calendar year, then on the basis
12		of the last partial calendar year during which any of such
13		companies were authorized to transact business in this State.
14		(Source: P.A. 77-2087.)
15		(215 ILCS 5/415) (from Ch. 73, par. 1027)
16		Sec. 415. No taxes to be imposed by political
17		subdivisions. The fees, charges and taxes provided for by
18		this Article shall be in lieu of all license fees or privilege
19		or occupation taxes or other fees levied or assessed by any
20		municipality, county or other political subdivision of this
21		State, and no municipality, county or other political
22		subdivision of this State shall impose any license fee or
23		privilege or occupation tax or fee upon any domestic, foreign
24		or non-domestic alien company, or upon any of its agents, for
25		the privilege of doing an insurance business therein, except

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1		the tax authorized by Division 10 of Article 11 of the Illinois
2		Municipal Code, as heretofore and hereafter amended. This
3		Section shall not be construed to prohibit the levy and
4		collection of:
5		(a) State, county or municipal taxes upon the real and
6		personal property of such a company, including the tax
7		imposed by Section 414 of this Code, and
8		(b) taxes for the purpose of maintaining the Office of
9		the State Fire Marshal and paying the expenses incident
10		thereto.
11		(Source: P.A. 91-357, eff. 7-29-99.)
12		(215 ILCS 5/444) (from Ch. 73, par. 1056)
13		Sec. 444. Retaliation.
14		(1) Whenever the existing or future laws of any other
15		state or country shall require of companies incorporated or
16		organized under the laws of this State as a condition
17		precedent to their doing business in such other state or
18		country, compliance with laws, rules, regulations, and
19		prohibitions more onerous or burdensome than the rules and
20		regulations imposed by this State on foreign or non-domestic
21		alien companies, or shall require any deposit of securities or
22		other obligations in such state or country, for the protection
23		of policyholders or otherwise or require of such companies or
24		agents thereof or brokers the payment of penalties, fees,
25		charges, or taxes greater than the penalties, fees, charges,

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1		or taxes required in the aggregate for like purposes by this
2		Code or any other law of this State, of foreign or non-domestic
3		alien companies, agents thereof or brokers, then such laws,
4		rules, regulations, and prohibitions of said other state or
5		country shall apply to companies incorporated or organized
6		under the laws of such state or country doing business in this
7		State, and all such companies, agents thereof, or brokers
8		doing business in this State, shall be required to make
9		deposits, pay penalties, fees, charges, and taxes, in amounts
10		equal to those required in the aggregate for like purposes of
11		Illinois companies doing business in such state or country,
12		agents thereof or brokers. Whenever any other state or country
13		shall refuse to permit any insurance company incorporated or
14		organized under the laws of this State to transact business
15		according to its usual plan in such other state or country, the
16		director may, if satisfied that such company of this State is
17		solvent, properly managed, and can operate legally under the
18		laws of such other state or country, forthwith suspend or
19		cancel the license of every insurance company doing business
20		in this State which is incorporated or organized under the
21		laws of such other state or country to the extent that it
22		insures in this State against any of the risks or hazards which
23		are sought to be insured against by the company of this State
24		in such other state or country.
25		(2) The provisions of this Section shall not apply to
26		residual market or special purpose assessments or guaranty

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1		fund or guaranty association assessments, both under the laws
2		of this State and under the laws of any other state or country,
3		and any tax offset or credit for any such assessment shall, for
4		purposes of this Section, be treated as a tax paid both under
5		the laws of this State and under the laws of any other state or
6		country.
7		(3) The terms "penalties", "fees", "charges", and "taxes"
8		in subsection (1) of this Section shall include: the
9		penalties, fees, charges, and taxes collected on a cash basis
10		under State law and referenced within Article XXV exclusive of
11		any items referenced by subsection (2) of this Section, but
12		including any tax offset allowed under Section 531.13 of this
13		Code; the aggregate Illinois corporate income taxes paid under
14		Sections 601 and 803 of the Illinois Income Tax Act during the
15		calendar year for which the retaliatory tax calculation is
16		being made, less the recapture of any Illinois corporate
17		income tax cash refunds to the extent that the amount of tax
18		refunded was reported as part of the Illinois basis in the
19		calculation of the retaliatory tax for a prior tax year,
20		provided that such recaptured refund shall not exceed the
21		amount necessary for equivalence of the Illinois basis with
22		the state of incorporation basis in such tax year, and after
23		any tax offset allowed under Section 531.13 of this Code;
24		income or personal property taxes imposed by other states or
25		countries; penalties, fees, charges, and taxes of other states
26		or countries imposed for purposes like those of the penalties,

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1		fees, charges, and taxes specified in Article XXV of this Code
2		exclusive of any item referenced in subsection (2) of this
3		Section; and any penalties, fees, charges, and taxes required
4		as a franchise, privilege, or licensing tax for conducting the
5		business of insurance whether calculated as a percentage of
6		income, gross receipts, premium, or otherwise.
7		(4) Nothing contained in this Section or Section 409 or
8		Section 444.1 is intended to authorize or expand any power of
9		local governmental units or municipalities to impose taxes,
10		fees, or charges.
11		(5) This Section is subject to the provisions of Section
12		10 of the New Markets Development Program Act.
13		(Source: P.A. 98-1169, eff. 1-9-15.)
14		(215 ILCS 5/444.1) (from Ch. 73, par. 1056.1)
15		Sec. 444.1. Payment of retaliatory taxes.
16		(1) Every foreign or non-domestic alien company doing
17		insurance business in this State shall pay the Director the
18		retaliatory tax determined in accordance with Section 444.
19		(2) (a) All companies subject to the provisions of this
20		Section shall make an annual return for the preceding calendar
21		year on or before March 15 setting forth such information on
22		such forms as the Director may reasonably require. Payments of
23		quarterly installments of the taxpayer's total estimated
24		retaliatory tax for the current calendar year shall be due on
25		or before April 15, June 15, September 15, and December 15 of

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1		such year, except that all companies transacting insurance
2		business in this State whose annual tax for the immediately
3		preceding calendar year was less than $5,000 shall make only
4		an annual return. Failure of a company to make the annual
5		payment, or to make the quarterly payments, if required, of at
6		least one-fourth of either (i) the total tax paid during the
7		previous calendar year or (ii) 80% of the actual tax for the
8		current calendar year shall subject it to the penalty
9		provisions set forth in Section 412 of this Code.
10		(b) Notwithstanding the foregoing provisions of paragraph
11		(a) of this subsection, the retaliatory tax liability of
12		companies under Section 444 of this Code for the calendar year
13		ended December 31, 1997 shall be determined in accordance with
14		this amendatory Act of 1998 and shall include in the aggregate
15		comparative tax burden for the State of Illinois, any tax
16		offset allowed under Section 531.13 of this Code and any
17		income taxes paid for the year 1997 under subsections (a)
18		through (d) of Section 201 of the Illinois Income Tax Act after
19		any tax offset allowed under Section 531.13 of this Code.
20		(i) Any annual retaliatory tax returns and payments
21		made for the year ended December 31, 1997 and any
22		quarterly installments of the taxpayer's total estimated
23		1998 retaliatory tax liability paid prior to the effective
24		date of this Amendatory Act of 1998 that do not include the
25		items specified by subsection (1) of this Section shall be
26		amended and restated, at the taxpayer's election, on forms

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1		prepared by the Director so as to provide for the
2		inclusion of such items. An amended and restated return
3		for the year ended December 31, 1997 filed under this
4		subparagraph shall treat any payment of estimated
5		privilege taxes under Section 409 as in effect prior to
6		October 23, 1997 as a payment of estimated retaliatory
7		taxes for the year ended December 31, 1997.
8		(ii) Any overpayment resulting from such amended
9		return and restated tax liability shall be allowed as a
10		credit against any subsequent privilege or retaliatory tax
11		obligations of the taxpayer.
12		(iii) In the year 1999 and thereafter all companies
13		shall make annual and quarterly installments of their
14		estimated tax as provided by paragraph (a) of this
15		subsection.
16		(3) Any tax payment made under this Section and any tax
17		returns prepared in compliance with Section 410 shall give
18		full consideration to the impact of any future reduction in or
19		elimination of a taxpayer's liability under Section 409,
20		whether such reduction or elimination is due to an operation
21		of law or an Act of the General Assembly.
22		(4) Any foreign or non-domestic alien taxpayer who makes,
23		under protest, a tax payment required by Section 409 shall, at
24		the time of payment, file a retaliatory tax return sufficient
25		to disclose the full amount of retaliatory taxes which would
26		be due and owing for the tax period in question if the protest

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1		were upheld. Notwithstanding the provisions of the State
2		Officers and Employees Money Disposition Act or any other laws
3		of this State, the protested payment, to the extent of the
4		retaliatory tax so disclosed, shall be deposited directly in
5		the General Revenue Fund; and the balance of the payment, if
6		any, shall be deposited in a protest account pursuant to the
7		provisions of the aforesaid Act, as now or hereafter amended.
8		(5) The failure of a company to make the annual payment or
9		to make the quarterly payments, if required, of at least
10		one-fourth of either (i) the total tax paid during the
11		preceding calendar year or (ii) 80% of the actual tax for the
12		current calendar year shall subject it to the penalty
13		provisions set forth in Section 412 of this Code.
14		(6) This Section is subject to the provisions of Section
15		10 of the New Markets Development Program Act.
16		(Source: P.A. 95-1024, eff. 12-31-08.)
17		(215 ILCS 5/445) (from Ch. 73, par. 1057)
18		Sec. 445. Surplus line.
19		(1) Definitions. For the purposes of this Section:
20		"Affiliate" means, with respect to an insured, any entity
21		that controls, is controlled by, or is under common control
22		with the insured. For the purpose of this definition, an
23		entity has control over another entity if:
24		(A) the entity directly or indirectly or acting
25		through one or more other persons owns, controls, or has

SB3865 Engrossed - 480 - LRB102 24242 RJF 33473 b
1		the power to vote 25% or more of any class of voting
2		securities of the other entity; or
3		(B) the entity controls in any manner the election of
4		a majority of the directors or trustees of the other
5		entity.
6		"Affiliated group" means any group of entities that are
7		all affiliated.
8		"Authorized insurer" means an insurer that holds a
9		certificate of authority issued by the Director but, for the
10		purposes of this Section, does not include a domestic surplus
11		line insurer as defined in Section 445a or any residual market
12		mechanism.
13		"Exempt commercial purchaser" means any person purchasing
14		commercial insurance that, at the time of placement, meets the
15		following requirements:
16		(A) The person employs or retains a qualified risk
17		manager to negotiate insurance coverage.
18		(B) The person has paid aggregate nationwide
19		commercial property and casualty insurance premiums in
20		excess of $100,000 in the immediately preceding 12 months.
21		(C) The person meets at least one of the following
22		criteria:
23		(I) The person possesses a net worth in excess of
24		$20,000,000, as such amount is adjusted pursuant to
25		the provision in this definition concerning percentage
26		change.

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1		(II) The person generates annual revenues in
2		excess of $50,000,000, as such amount is adjusted
3		pursuant to the provision in this definition
4		concerning percentage change.
5		(III) The person employs more than 500 full-time
6		or full-time equivalent employees per individual
7		insured or is a member of an affiliated group
8		employing more than 1,000 employees in the aggregate.
9		(IV) The person is a not-for-profit organization
10		or public entity generating annual budgeted
11		expenditures of at least $30,000,000, as such amount
12		is adjusted pursuant to the provision in this
13		definition concerning percentage change.
14		(V) The person is a municipality with a population
15		in excess of 50,000 persons.
16		Effective on January 1, 2015 and each fifth January 1
17		occurring thereafter, the amounts in subitems (I), (II), and
18		(IV) of item (C) of this definition shall be adjusted to
19		reflect the percentage change for such 5-year period in the
20		Consumer Price Index for All Urban Consumers published by the
21		Bureau of Labor Statistics of the Department of Labor.
22		"Home state" means the following:
23		(A) With respect to an insured, except as provided in
24		item (B) of this definition:
25		(I) the state in which an insured maintains its
26		principal place of business or, in the case of an

SB3865 Engrossed - 482 - LRB102 24242 RJF 33473 b
1		individual, the individual's principal residence; or
2		(II) if 100% of the insured risk is located out of
3		the state referred to in subitem (I), the state to
4		which the greatest percentage of the insured's taxable
5		premium for that insurance contract is allocated.
6		(B) If more than one insured from an affiliated group
7		are named insureds on a single surplus line insurance
8		contract, then "home state" means the home state, as
9		determined pursuant to item (A) of this definition, of the
10		member of the affiliated group that has the largest
11		percentage of premium attributed to it under such
12		insurance contract.
13		If more than one insured from a group that is not
14		affiliated are named insureds on a single surplus line
15		insurance contract, then:
16		(I) if individual group members pay 100% of the
17		premium for the insurance from their own funds, "home
18		state" means the home state, as determined pursuant to
19		item (A) of this definition, of each individual group
20		member; each individual group member's coverage under
21		the surplus line insurance contract shall be treated
22		as a separate surplus line contract for the purposes
23		of this Section;
24		(II) otherwise, "home state" means the home state,
25		as determined pursuant to item (A) of this definition,
26		of the group.

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1		Nothing in this definition shall be construed to alter the
2		terms of the surplus line insurance contract.
3		"Master policy" means a surplus line insurance contract
4		with a single set of general contractual terms that are
5		designed to apply on a group basis to multiple insureds who may
6		or may not be affiliated and who may be added to or removed
7		from the contract throughout the course of the contract
8		period. A master policy may include certain provisions that
9		vary for each insured depending on the insured's
10		characteristics and the coverage sought.
11		"Multi-State risk" means a risk with insured exposures in
12		more than one State.
13		"NAIC" means the National Association of Insurance
14		Commissioners or any successor entity.
15		"Personal lines insurance" means insurance as defined in
16		subsection (a), (b), or (c) of Section 143.13 of this Code.
17		"Premium" means any amount designated as premium on the
18		declarations page or elsewhere in a policy and on any
19		endorsement, but does not include taxes, the Surplus Line
20		Association of Illinois recording fee, or any other fee.
21		"Program business" means a clearly defined group of
22		insurance contracts procured by a licensed surplus line
23		producer from an unauthorized insurer, under a single
24		agreement between the producer and insurer, for insureds with
25		the same or similar characteristics and containing the same or
26		similar contract terms.

SB3865 Engrossed - 484 - LRB102 24242 RJF 33473 b
1		"Qualified risk manager" means, with respect to a
2		policyholder of commercial insurance, a person who meets all
3		of the following requirements:
4		(A) The person is an employee of, or third-party
5		consultant retained by, the commercial policyholder.
6		(B) The person provides skilled services in loss
7		prevention, loss reduction, or risk and insurance coverage
8		analysis, and purchase of insurance.
9		(C) With regard to the person:
10		(I) the person has:
11		(a) a bachelor's degree or higher from an
12		accredited college or university in risk
13		management, business administration, finance,
14		economics, or any other field determined by the
15		Director or his designee to demonstrate minimum
16		competence in risk management; and
17		(b) the following:
18		(i) three years of experience in risk
19		financing, claims administration, loss
20		prevention, risk and insurance analysis, or
21		purchasing commercial lines of insurance; or
22		(ii) alternatively has:
23		(AA) a designation as a Chartered
24		Property and Casualty Underwriter (in this
25		subparagraph (ii) referred to as "CPCU")
26		issued by the American Institute for

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1		CPCU/Insurance Institute of America;
2		(BB) a designation as an Associate in
3		Risk Management (ARM) issued by the
4		American Institute for CPCU/Insurance
5		Institute of America;
6		(CC) a designation as Certified Risk
7		Manager (CRM) issued by the National
8		Alliance for Insurance Education &
9		Research;
10		(DD) a designation as a RIMS Fellow
11		(RF) issued by the Global Risk Management
12		Institute; or
13		(EE) any other designation,
14		certification, or license determined by
15		the Director or his designee to
16		demonstrate minimum competency in risk
17		management;
18		(II) the person has:
19		(a) at least 7 years of experience in risk
20		financing, claims administration, loss prevention,
21		risk and insurance coverage analysis, or
22		purchasing commercial lines of insurance; and
23		(b) has any one of the designations specified
24		in subparagraph (ii) of paragraph (b);
25		(III) the person has at least 10 years of
26		experience in risk financing, claims administration,

SB3865 Engrossed - 486 - LRB102 24242 RJF 33473 b
1		loss prevention, risk and insurance coverage analysis,
2		or purchasing commercial lines of insurance; or
3		(IV) the person has a graduate degree from an
4		accredited college or university in risk management,
5		business administration, finance, economics, or any
6		other field determined by the Director or his or her
7		designee to demonstrate minimum competence in risk
8		management.
9		"Residual market mechanism" means an association,
10		organization, or other entity described in Article XXXIII of
11		this Code or Section 7-501 of the Illinois Vehicle Code or any
12		similar association, organization, or other entity.
13		"State" means any state of the United States, the District
14		of Columbia, the Commonwealth of Puerto Rico, Guam, the
15		Northern Mariana Islands, the Virgin Islands, and American
16		Samoa.
17		"Surplus line insurance" means insurance on a risk:
18		(A) of the kinds specified in Classes 2 and 3 of
19		Section 4 of this Code; and
20		(B) that is procured from an unauthorized insurer
21		after the insurance producer representing the insured or
22		the surplus line producer is unable, after diligent
23		effort, to procure the insurance from authorized insurers;
24		and
25		(C) where Illinois is the home state of the insured,
26		for policies effective, renewed or extended on July 21,

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1		2011 or later and for multiyear policies upon the policy
2		anniversary that falls on or after July 21, 2011; and
3		(D) that is located in Illinois, for policies
4		effective prior to July 21, 2011.
5		"Taxable premium" means a premium for any risk that is
6		located in or attributed to any state.
7		"Unauthorized insurer" means an insurer that does not hold
8		a valid certificate of authority issued by the Director but,
9		for the purposes of this Section, shall also include a
10		domestic surplus line insurer as defined in Section 445a.
11		(1.5) Procuring surplus line insurance; surplus line
12		insurer requirements.
13		(a) License required. Insurance producers may procure
14		surplus line insurance only if licensed as a surplus line
15		producer under this Section.
16		(b) Domestic and foreign insurer eligibility. Licensed
17		surplus line producers may procure surplus line insurance
18		from an unauthorized insurer domiciled in any state only
19		if the insurer:
20		(i) is permitted in its domiciliary jurisdiction
21		to write the type of insurance involved; and
22		(ii) has, based upon information available to the
23		surplus line producer, a policyholders surplus of not
24		less than $15,000,000 determined in accordance with
25		the laws of its domiciliary jurisdiction; and
26		(iii) has standards of solvency and management

SB3865 Engrossed - 488 - LRB102 24242 RJF 33473 b
1		that are adequate for the protection of policyholders.
2		Where an unauthorized insurer does not meet the
3		standards set forth in (ii) and (iii) above, a surplus
4		line producer may, if necessary, procure insurance from
5		that insurer only if prior written warning of such fact or
6		condition is given to the insured by the insurance
7		producer or surplus line producer.
8		(c) Non-domestic Alien insurer eligibility. Licensed
9		surplus line producers may procure surplus line insurance
10		from an unauthorized insurer not domiciled in any state
11		only if the insurer meets the standards for unauthorized
12		insurers domiciled in any state in paragraph (b) of this
13		subsection (1.5) or is listed on the Quarterly Listing of
14		Alien Insurers maintained by the International Insurers
15		Department of the NAIC at the time of procurement. The
16		Director shall make the Quarterly Listing of Alien
17		Insurers available to surplus line producers without
18		charge.
19		(d) Prohibited transactions. Insurance producers shall
20		not procure from an unauthorized insurer an insurance
21		policy:
22		(i) that is designed to satisfy the proof of
23		financial responsibility and insurance requirements in
24		any Illinois law where the law requires that the proof
25		of insurance is issued by an authorized insurer or
26		residual market mechanism;

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1		(ii) that covers the risk of accidental injury to
2		employees arising out of and in the course of
3		employment according to the provisions of the Workers'
4		Compensation Act; or
5		(iii) that insures any Illinois personal lines
6		risk that is eligible for residual market mechanism
7		coverage, unless the insured or prospective insured
8		requests limits of liability greater than the limits
9		provided by the residual market mechanism. In the
10		course of making a diligent effort to procure
11		insurance from authorized insurers, an insurance
12		producer shall not be required to submit a risk to a
13		residual market mechanism when the risk is not
14		eligible for coverage or exceeds the limits available
15		in the residual market mechanism.
16		Where there is an insurance policy issued by an
17		authorized insurer or residual market mechanism insuring a
18		risk described in item (i), (ii), or (iii) above, nothing
19		in this paragraph shall be construed to prohibit a surplus
20		line producer from procuring from an unauthorized insurer
21		a policy insuring the risk on an excess or umbrella basis
22		where the excess or umbrella policy is written over one or
23		more underlying policies.
24		(e) Exempt commercial purchaser diligent effort.
25		Licensed surplus line producers may procure surplus line
26		insurance from an unauthorized insurer for an exempt

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1		commercial purchaser without making the required diligent
2		effort to procure the insurance from authorized insurers
3		if:
4		(i) the producer has disclosed to the exempt
5		commercial purchaser that such insurance may or may
6		not be available from authorized insurers that may
7		provide greater protection with more regulatory
8		oversight; and
9		(ii) the exempt commercial purchaser has
10		subsequently in writing requested the producer to
11		procure such insurance from an unauthorized insurer.
12		(f) Commercial wholesale transaction diligent effort.
13		A licensed surplus line producer may procure a surplus
14		line insurance contract, other than a personal lines
15		insurance contract, from an unauthorized insurer without
16		making the required diligent effort to procure the
17		insurance from authorized insurers if the risk was
18		referred to the surplus line producer by an
19		Illinois-licensed insurance producer who is not affiliated
20		with the surplus line producer.
21		(g) Master policy diligent effort. For a master policy
22		insurance contract, a licensed surplus line producer may
23		make the required diligent effort to procure the insurance
24		from authorized insurers annually for the master policy
25		rather than individually for each insured that is added
26		during the policy period. The diligent effort shall

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1		include all variable provisions of the master policy.
2		(h) Program business diligent effort. For program
3		business, a licensed surplus line producer may make the
4		required diligent effort to procure the insurance from
5		authorized insurers annually for the program rather than
6		individually for each contract. The diligent effort shall
7		include all variable provisions of the master policy.
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 for 7 years from
14		the policy effective date which shall be open at all times to
15		the inspection of the Director or his 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
20		such 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;

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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
4		on or before February 1 and August 1 of each year a report
5		in the form prescribed by the Director on all surplus line
6		insurance procured from unauthorized insurers and
7		submitted to the Surplus Line Association of Illinois
8		during the preceding 6 month period ending December 31 or
9		June 30 respectively, and on the filing of such report
10		shall pay to the Director for the use and benefit of the
11		State a sum equal to the surplus line tax rate multiplied
12		by the gross taxable premiums less returned taxable
13		premiums upon all surplus line insurance submitted to the
14		Surplus Line Association of Illinois during the preceding
15		6 months.
16		Any surplus line producer who fails to pay the full
17		amount due under this subsection is liable, in addition to
18		the amount due, for such late fee, penalty, and interest
19		charges as are provided for under Section 412 of this
20		Code. The Director, through the Attorney General, may
21		institute an action in the name of the People of the State
22		of Illinois, in any court of competent jurisdiction, for
23		the recovery of the amount of such taxes, late fees,
24		interest, and penalties due, and prosecute the same to
25		final judgment, and take such steps as are necessary to
26		collect the same.

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1		(b) Fire Marshal Tax. Each surplus line producer shall
2		file with the Director on or before February 1 of each year
3		a report in the form prescribed by the Director on all fire
4		insurance procured from unauthorized insurers and
5		submitted to the Surplus Line Association of Illinois
6		during the previous year that is subject to tax under
7		Section 12 of the Fire Investigation Act and shall pay to
8		the Director the fire marshal tax required thereunder.
9		(c) Taxes and fees charged to insured. The taxes
10		imposed under this subsection and the recording fees
11		charged by the Surplus Line Association of Illinois may be
12		charged to and collected from surplus line insureds.
13		(4) (Blank).
14		(5) Submission of documents to Surplus Line Association of
15		Illinois. A surplus line producer shall submit every insurance
16		contract and premium-bearing endorsement issued under his or
17		her license to the Surplus Line Association of Illinois for
18		recording. The submission and recording may be effected
19		through electronic means. The submission shall set forth:
20		(a) the name of the insured;
21		(b) the description and location of the insured
22		property or risk;
23		(c) (blank);
24		(d) the gross premiums charged or returned;
25		(e) the name of the unauthorized insurer from whom
26		coverage has been procured;

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1		(f) the kind or kinds of insurance procured; and
2		(g) amount of premium subject to tax required by
3		Section 12 of the Fire Investigation Act.
4		Proposals, endorsements, and other documents which are
5		incidental to the insurance but which do not affect the
6		premium charged are exempted from the submission and recording
7		requirements.
8		The submission of insuring contracts to the Surplus Line
9		Association of Illinois constitutes a certification by the
10		surplus line producer or by the insurance producer who
11		presented the risk to the surplus line producer for placement
12		as a surplus line risk that after diligent effort, where
13		required, the required insurance could not be procured from
14		authorized insurers and that such procurement was otherwise in
15		accordance with the surplus line law.
16		(6) Evidence of recording required. It shall be unlawful
17		for an insurance producer to deliver any unauthorized insurer
18		contract or premium-bearing endorsement unless it contains
19		evidence of recording by the Surplus Line Association of
20		Illinois.
21		(7) Inspection of records. A surplus line producer shall
22		maintain separate records of the business transacted under his
23		or her license for 7 years from the policy effective date,
24		including complete copies of surplus line insurance contracts
25		maintained on paper or by electronic means, which records
26		shall be open at all times for inspection by the Director and

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1		by the Surplus Line Association of Illinois.
2		(8) Violations and penalties. The Director may suspend or
3		revoke or refuse to renew a surplus line producer license for
4		any violation of this Code. In addition to or in lieu of
5		suspension or revocation, the Director may subject a surplus
6		line producer to a civil penalty of up to $2,000 for each cause
7		for suspension or revocation. Such penalty is enforceable
8		under subsection (5) of Section 403A of this Code.
9		Whenever it appears to the satisfaction of the Director
10		that a surplus line producer has made a documented good faith
11		determination of the home state for a surplus line insurance
12		contract and has paid the surplus line taxes to a state other
13		than Illinois, and the Director determines that the producer's
14		good faith determination was incorrect and the home state is
15		Illinois, the surplus line producer may, at the discretion of
16		the Director, be required to submit the contract to the
17		Surplus Line Association of Illinois and pay applicable taxes
18		and recording fees, but there shall be no penalty, interest,
19		or late fee assessed.
20		(9) Director may declare insurer ineligible. If the
21		Director determines that the further assumption of risks might
22		be hazardous to the policyholders of an unauthorized insurer,
23		the Director may order the Surplus Line Association of
24		Illinois not to accept and record insurance contracts
25		evidencing insurance in such insurer and order surplus line
26		producers to cease procuring insurance from such insurer.

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1		(10) Service of process upon Director. Insurance contracts
2		delivered under this Section from unauthorized insurers, other
3		than domestic surplus line insurers as defined in Section
4		445a, shall contain a provision designating the Director and
5		his successors in office the true and lawful attorney of the
6		insurer upon whom may be served all lawful process in any
7		action, suit or proceeding arising out of such insurance.
8		Service of process made upon the Director to be valid
9		hereunder must state the name of the insured, the name of the
10		unauthorized insurer and identify the contract of insurance.
11		The Director at his option is authorized to forward a copy of
12		the process to the Surplus Line Association of Illinois for
13		delivery to the unauthorized insurer or the Director may
14		deliver the process to the unauthorized insurer by other means
15		which he considers to be reasonably prompt and certain.
16		(10.5) Required notice to policyholder. Insurance
17		contracts delivered under this Section from unauthorized
18		insurers, other than domestic surplus line insurers as defined
19		in Section 445a, shall have stamped or imprinted on the first
20		page thereof in not less than 12-pt. bold face type the
21		following legend: "Notice to Policyholder: This contract is
22		issued, pursuant to Section 445 of the Illinois Insurance
23		Code, by a company not authorized and licensed to transact
24		business in Illinois and as such is not covered by the Illinois
25		Insurance Guaranty Fund." Insurance contracts delivered under
26		this Section from domestic surplus line insurers as defined in

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1		Section 445a shall have stamped or imprinted on the first page
2		thereof in not less than 12-pt. bold face type the following
3		legend: "Notice to Policyholder: This contract is issued by a
4		domestic surplus line insurer, as defined in Section 445a of
5		the Illinois Insurance Code, pursuant to Section 445, and as
6		such is not covered by the Illinois Insurance Guaranty Fund."
7		(11) Marine, aviation, and transportation. The Illinois
8		Surplus Line law does not apply to insurance of property and
9		operations of railroads or aircraft engaged in interstate or
10		foreign commerce, insurance of vessels, crafts or hulls,
11		cargoes, marine builder's risks, marine protection and
12		indemnity, or other risks including strikes and war risks
13		insured under ocean or wet marine forms of policies.
14		(12) Applicability of Illinois Insurance Code. Surplus
15		line insurance procured under this Section, including
16		insurance procured from a domestic surplus line insurer, is
17		not subject to the provisions of the Illinois Insurance Code
18		other than Sections 123, 123.1, 401, 401.1, 402, 403, 403A,
19		408, 412, 445, 445a, 445.1, 445.2, 445.3, 445.4, and all of the
20		provisions of Article XXXI to the extent that the provisions
21		of Article XXXI are not inconsistent with the terms of this
22		Act.
23		(Source: P.A. 102-224, eff. 1-1-22.)
24		(215 ILCS 5/448) (from Ch. 73, par. 1060)
25		Sec. 448. Certain powers reserved to General Assembly.

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1		The General Assembly shall at all times have power to
2		prescribe such regulations, provisions, and limitations as it
3		may deem advisable, which regulations, provisions, and
4		limitations shall be binding upon any and all companies,
5		domestic, foreign or non-domestic alien, subject to the
6		provisions of this Code, and the General Assembly shall have
7		power to amend, repeal, or modify this Code at pleasure.
8		(Source: Laws 1937, p. 696.)
9		(215 ILCS 5/451) (from Ch. 73, par. 1063)
10		Sec. 451. Companies not subject to Code. This Code shall
11		not apply to companies now or hereafter organized or
12		transacting business under the Title Insurance Act, or Act
13		amendatory thereof, supplementary thereto, or in replacement
14		thereof; nor to corporations now or hereafter organized and
15		transacting business under "An Act to provide for the
16		incorporation and regulation of nonprofit hospital service
17		corporations" approved July 6, 1935, or Act amendatory thereof
18		or supplementary thereto; nor shall any part of this Code
19		other than Articles X, XI, XIII, and XXIV apply to companies
20		now or hereafter organized or transacting business under an
21		Act entitled, "An Act relating to local mutual district,
22		county and township insurance companies," approved March 13,
23		1936, or Act amendatory thereof or supplementary thereto. No
24		domestic company shall be organized under this Code, nor shall
25		any foreign or non-domestic alien company receive a

SB3865 Engrossed - 499 - LRB102 24242 RJF 33473 b
1		certificate of authority under this Code, to transact the
2		business of title insurance. The changes made to this Section
3		by Public Act 96-334 are a statement and clarification of
4		existing law.
5		(Source: P.A. 96-334, eff. 1-1-10; 96-1000, eff. 7-2-10.)
6		(215 ILCS 5/531.09) (from Ch. 73, par. 1065.80-9)
7		Sec. 531.09. Assessments.
8		(1) For the purpose of providing the funds necessary to
9		carry out the powers and duties of the Association, the board
10		of directors shall assess the member insurers, separately for
11		each account, at such times and for such amounts as the board
12		finds necessary. Assessments shall be due not less than 30
13		days after written notice to the member insurers and shall
14		accrue interest from the due date at such adjusted rate as is
15		established under Section 6621 of Chapter 26 of the United
16		States Code and such interest shall be compounded daily.
17		(2) There shall be 2 classes of assessments, as follows:
18		(a) Class A assessments shall be made for the purpose
19		of meeting administrative costs and other general expenses
20		and examinations conducted under the authority of the
21		Director under subsection (5) of Section 531.12.
22		(b) Class B assessments shall be made to the extent
23		necessary to carry out the powers and duties of the
24		Association under Section 531.08 with regard to an
25		impaired or insolvent domestic insurer or insolvent

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1		foreign or non-domestic alien insurers.
2		(3)(a) The amount of any Class A assessment shall be
3		determined at the discretion of the board of directors and
4		such assessments shall be authorized and called on a non-pro
5		rata basis. The amount of any Class B assessment, except for
6		assessments related to long-term care insurance, shall be
7		allocated for assessment purposes among the accounts and
8		subaccounts pursuant to an allocation formula which may be
9		based on the premiums or reserves of the impaired or insolvent
10		insurer or any other standard deemed by the board in its sole
11		discretion as being fair and reasonable under the
12		circumstances.
13		(b) Class B assessments against member insurers for each
14		account and subaccount shall be in the proportion that the
15		premiums received on business in this State by each assessed
16		member insurer on policies or contracts covered by each
17		account or subaccount for the three most recent calendar years
18		for which information is available preceding the year in which
19		the member insurer became impaired or insolvent, as the case
20		may be, bears to such premiums received on business in this
21		State for such calendar years by all assessed member insurers.
22		(b-5) The amount of the Class B assessment for long-term
23		care insurance written by the impaired or insolvent insurer
24		shall be allocated according to a methodology included in the
25		plan of operation and approved by the Director. The
26		methodology shall provide for 50% of the assessment to be

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1		allocated to accident and health member insurers and 50% to be
2		allocated to life and annuity member insurers.
3		(c) Assessments for funds to meet the requirements of the
4		Association with respect to an impaired or insolvent insurer
5		shall not be made until necessary to implement the purposes of
6		this Article. Classification of assessments under subsection
7		(2) and computations of assessments under this subsection
8		shall be made with a reasonable degree of accuracy,
9		recognizing that exact determinations may not always be
10		possible.
11		(4) The Association may abate or defer, in whole or in
12		part, the assessment of a member insurer if, in the opinion of
13		the board, payment of the assessment would endanger the
14		ability of the member insurer to fulfill its contractual
15		obligations. In the event an assessment against a member
16		insurer is abated or deferred in whole or in part the amount by
17		which the assessment is abated or deferred may be assessed
18		against the other member insurers in a manner consistent with
19		the basis for assessments set forth in this Section. Once the
20		conditions that caused a deferral have been removed or
21		rectified, the member insurer shall pay all assessments that
22		were deferred pursuant to a repayment plan approved by the
23		Association.
24		(5) (a) Subject to the provisions of this paragraph, the
25		total of all assessments authorized by the Association with
26		respect to a member insurer for each subaccount of the life

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1		insurance and annuity account and for the health account shall
2		not in one calendar year exceed 2% of that member insurer's
3		average annual premiums received in this State on the policies
4		and contracts covered by the subaccount or account during the
5		3 calendar years preceding the year in which the member
6		insurer became an impaired or insolvent insurer.
7		If 2 or more assessments are authorized in one calendar
8		year with respect to member insurers that become impaired or
9		insolvent in different calendar years, the average annual
10		premiums for purposes of the aggregate assessment percentage
11		limitation referenced in subparagraph (a) of this paragraph
12		shall be equal and limited to the higher of the 3-year average
13		annual premiums for the applicable subaccount or account as
14		calculated pursuant to this Section.
15		If the maximum assessment, together with the other assets
16		of the Association in an account, does not provide in one year
17		in either account an amount sufficient to carry out the
18		responsibilities of the Association, the necessary additional
19		funds shall be assessed as soon thereafter as permitted by
20		this Article.
21		(b) The board may provide in the plan of operation a method
22		of allocating funds among claims, whether relating to one or
23		more impaired or insolvent insurers, when the maximum
24		assessment will be insufficient to cover anticipated claims.
25		(c) If the maximum assessment for a subaccount of the life
26		insurance and annuity account in one year does not provide an

SB3865 Engrossed - 503 - LRB102 24242 RJF 33473 b
1		amount sufficient to carry out the responsibilities of the
2		Association, then pursuant to paragraph (b) of subsection (3),
3		the board shall assess the other subaccounts of the life
4		insurance and annuity account for the necessary additional
5		amount, subject to the maximum stated in paragraph (a) of this
6		subsection.
7		(6) The board may, by an equitable method as established
8		in the plan of operation, refund to member insurers, in
9		proportion to the contribution of each member insurer to that
10		account, the amount by which the assets of the account exceed
11		the amount the board finds is necessary to carry out during the
12		coming year the obligations of the Association with regard to
13		that account, including assets accruing from net realized
14		gains and income from investments. A reasonable amount may be
15		retained in any account to provide funds for the continuing
16		expenses of the Association and for future losses.
17		(7) An assessment is deemed to occur on the date upon which
18		the board votes such assessment. The board may defer calling
19		the payment of the assessment or may call for payment in one or
20		more installments.
21		(8) It is proper for any member insurer, in determining
22		its premium rates and policy owner dividends as to any kind of
23		insurance or health maintenance organization business within
24		the scope of this Article, to consider the amount reasonably
25		necessary to meet its assessment obligations under this
26		Article.

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1		(9) The Association must issue to each member insurer
2		paying a Class B assessment under this Article a certificate
3		of contribution, in a form acceptable to the Director, for the
4		amount of the assessment so paid. All outstanding certificates
5		are of equal dignity and priority without reference to amounts
6		or dates of issue. A certificate of contribution may be shown
7		by the member insurer in its financial statement as an asset in
8		such form and for such amount, if any, and period of time as
9		the Director may approve, provided the member insurer shall in
10		any event at its option have the right to show a certificate of
11		contribution as an admitted asset at percentages of the
12		original face amount for calendar years as follows:
13		100% for the calendar year after the year of issuance;
14		80% for the second calendar year after the year of
15		issuance;
16		60% for the third calendar year after the year of
17		issuance;
18		40% for the fourth calendar year after the year of
19		issuance;
20		20% for the fifth calendar year after the year of
21		issuance.
22		(10) The Association may request information of member
23		insurers in order to aid in the exercise of its power under
24		this Section and member insurers shall promptly comply with a
25		request.
26		(Source: P.A. 100-687, eff. 8-3-18.)

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1		(215 ILCS 5/531.11) (from Ch. 73, par. 1065.80-11)
2		Sec. 531.11. Duties and powers of the Director. In
3		addition to the duties and powers enumerated elsewhere in this
4		Article:
5		(1) The Director must do all of the following:
6		(a) Upon request of the board of directors,
7		provide the Association with a statement of the
8		premiums in the appropriate accounts for each member
9		insurer.
10		(b) Notify the board of directors of the existence
11		of an impaired or insolvent insurer not later than 3
12		days after a determination of impairment or insolvency
13		is made or when the Director receives notice of
14		impairment or insolvency.
15		(c) Give notice to an impaired insurer as required
16		by Sections 34 or 60. Notice to the impaired insurer
17		shall constitute notice to its shareholders, if any.
18		(d) In any liquidation or rehabilitation
19		proceeding involving a domestic member insurer, be
20		appointed as the liquidator or rehabilitator. If a
21		foreign or non-domestic alien member insurer is
22		subject to a liquidation proceeding in its domiciliary
23		jurisdiction or state of entry, the Director shall be
24		appointed conservator.
25		(2) The Director may suspend or revoke, after notice

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1		and hearing, the certificate of authority to transact
2		business in this State of any member insurer which fails
3		to pay an assessment when due or fails to comply with the
4		plan of operation. As an alternative the Director may levy
5		a forfeiture on any member insurer which fails to pay an
6		assessment when due. Such forfeiture may not exceed 5% of
7		the unpaid assessment per month, but no forfeiture may be
8		less than $100 per month.
9		(3) Any action of the board of directors or the
10		Association may be appealed to the Director by any member
11		insurer or any other person adversely affected by such
12		action if such appeal is taken within 30 days of the action
13		being appealed. Any final action or order of the Director
14		is subject to judicial review in a court of competent
15		jurisdiction.
16		(4) The liquidator, rehabilitator, or conservator of
17		any impaired insurer may notify all interested persons of
18		the effect of this Article.
19		(Source: P.A. 100-687, eff. 8-3-18.)
20		(215 ILCS 5/534.5) (from Ch. 73, par. 1065.84-5)
21		Sec. 534.5. Member company. "Member Company" means any
22		insurance company organized as a stock company, mutual
23		company, reciprocal or Lloyds, which holds a certificate of
24		authority to transact any kind of insurance in this State to
25		which this Article applies, and which is either:

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1		(a) a domestic insurance company formed before or after
2		the effective date of this Article; or
3		(b) a foreign or non-domestic alien insurance company.
4		An insurance company shall cease to be a member company
5		effective on the day following the termination or expiration
6		of its license to transact the kinds of insurance to which this
7		Article applies; provided, however, that the insurance company
8		shall remain liable as a member company for any and all
9		obligations, including obligations for assessments levied
10		before the termination or expiration of the insurance
11		company's license and assessments levied after the termination
12		or expiration, based on any insolvency as to which the
13		determination of insolvency by a court of competent
14		jurisdiction occurs before the termination or expiration of
15		the insurance company's license.
16		(Source: P.A. 89-97, eff. 7-7-95.)
17		(215 ILCS 5/543.1) (from Ch. 73, par. 1065.93-1)
18		Sec. 543.1. The Director shall serve a copy of the
19		complaint seeking an Order of Liquidation with a finding of
20		insolvency against a domestic member company on the Fund at
21		the same time that such complaint is filed with the circuit
22		court or shall forward to the Fund notice of the filing of such
23		a complaint against a foreign or non-domestic alien member
24		company promptly upon receipt thereof. The Director also shall
25		serve on the Fund a copy of an Order of Liquidation with a

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1		finding of insolvency against a domestic member company
2		immediately after it is entered by the circuit court or shall
3		forward to the Fund a copy of such order against a foreign or
4		non-domestic alien member company promptly upon receipt
5		thereof.
6		(Source: P.A. 85-576.)
7		(215 ILCS 5/1103) (from Ch. 73, par. 1065.803)
8		Sec. 1103. Name. The corporate name of any trust organized
9		under this Article shall not be the same as or deceptively
10		similar to the name of any domestic insurance company or of any
11		foreign or non-domestic alien insurance company authorized to
12		transact business in this State.
13		(Source: P.A. 84-1431.)
14		Section 95. The Reinsurance Intermediary Act is amended by
15		changing Section 5 as follows:
16		(215 ILCS 100/5) (from Ch. 73, par. 1605)
17		Sec. 5. Definitions.
18		"Actuary" means a person who is a member in good standing
19		of the American Academy of Actuaries.
20		"Controlling person" means any person, firm, association,
21		or corporation that directly or indirectly has the power to
22		direct or cause to be directed the management, control, or
23		activities of the reinsurance intermediary.

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1		"Director" means the Director of the Department of
2		Insurance.
3		"Insurer" means any person, firm, association, or
4		corporation duly licensed in this State under the applicable
5		provisions of law as an insurer.
6		"Licensed producer" means an agent, broker, or reinsurance
7		intermediary licensed under the applicable provision of the
8		insurance law.
9		"Reinsurance intermediary" means an intermediary broker or
10		a manager.
11		"Intermediary broker" means any person, other than an
12		officer or employee of the ceding insurer, firm, association,
13		or corporation, who solicits, negotiates, or places
14		reinsurance cessions or retrocessions on behalf of a ceding
15		insurer without the authority or power to bind reinsurance on
16		behalf of the insurer.
17		"Intermediary manager" means any person, firm,
18		association, or corporation that has authority to bind or
19		manages all or part of the assumed reinsurance business of a
20		reinsurer (including the management of a separate division,
21		department, or underwriting office) and acts as an agent for
22		the reinsurer. However, the following persons shall not be
23		considered an intermediary manager, with respect to the
24		reinsurer, for the purposes of this Act:
25		(1) An employee of the reinsurer.
26		(2) A U.S. Manager of the United States branch of a

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1		non-domestic an alien reinsurer.
2		(3) An underwriting manager that, under a contract,
3		manages all the reinsurance operations of the reinsurer,
4		is under common control with the reinsurer, subject to
5		Article VIII 1/2 of the Illinois Insurance Code, and whose
6		compensation is not based on the volume of premiums
7		written.
8		(4) The manager of a group, association, pool, or
9		organization of insurers that engage in joint underwriting
10		or joint reinsurance and who are subject to examinations
11		by the insurance regulatory authority of the state in
12		which the manager's principal business office is located.
13		"Reinsurer" means any person, firm, association, or
14		corporation duly licensed in this State under the applicable
15		provisions of law as an insurer with the authority to assume
16		reinsurance.
17		"To be in violation" means that the reinsurance
18		intermediary, insurer, or reinsurer for whom the reinsurance
19		intermediary was acting failed to substantially comply with
20		the provisions of this Act.
21		"Qualified United States financial institution" means an
22		institution that:
23		(1) is organized or (in the case of a U.S. office of a
24		foreign banking organization) licensed under the laws of
25		the United States or any state thereof;
26		(2) is regulated, supervised, and examined by federal

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1		or state authorities having regulatory authority over
2		banks and trust companies; and
3		(3) has been determined by either the Director or the
4		Securities Valuation Office of the National Association of
5		Insurance Commissioners to meet the standards of financial
6		condition and standing as are considered necessary and
7		appropriate to regulate the quality of financial
8		institutions whose letters of credit will be acceptable to
9		the Director.
10		(Source: P.A. 87-108.)
11		Section 100. The Comprehensive Health Insurance Plan Act
12		is amended by changing Section 7 as follows:
13		(215 ILCS 105/7) (from Ch. 73, par. 1307)
14		Sec. 7. Eligibility.
15		a. Except as provided in subsection (e) of this Section or
16		in Section 15 of this Act, any person who is either a citizen
17		of the United States or a noncitizen an alien lawfully
18		admitted for permanent residence and who has been for a period
19		of at least 180 days and continues to be a resident of this
20		State shall be eligible for Plan coverage under this Section
21		if evidence is provided of:
22		(1) A notice of rejection or refusal to issue
23		substantially similar individual health insurance coverage
24		for health reasons by a health insurance issuer;

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1		(2) A refusal by a health insurance issuer to issue
2		individual health insurance coverage except at a rate
3		exceeding the applicable Plan rate for which the person is
4		responsible; or
5		(3) The absence of available health insurance coverage
6		for a person under 19 years of age.
7		A rejection or refusal by a group health plan or health
8		insurance issuer offering only stop-loss or excess of loss
9		insurance or contracts, agreements, or other arrangements for
10		reinsurance coverage with respect to the applicant shall not
11		be sufficient evidence under this subsection.
12		b. The Board shall promulgate a list of medical or health
13		conditions for which a person who is either a citizen of the
14		United States or a noncitizen an alien lawfully admitted for
15		permanent residence and a resident of this State would be
16		eligible for Plan coverage without applying for health
17		insurance coverage pursuant to subsection a. of this Section.
18		Persons who can demonstrate the existence or history of any
19		medical or health conditions on the list promulgated by the
20		Board shall not be required to provide the evidence specified
21		in subsection a. of this Section. The list shall be effective
22		on the first day of the operation of the Plan and may be
23		amended from time to time as appropriate.
24		c. Family members of the same household who each are
25		covered persons are eligible for optional family coverage
26		under the Plan.

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1		d. For persons qualifying for coverage in accordance with
2		Section 7 of this Act, the Board shall, if it determines that
3		such appropriations as are made pursuant to Section 12 of this
4		Act are insufficient to allow the Board to accept all of the
5		eligible persons which it projects will apply for enrollment
6		under the Plan, limit or close enrollment to ensure that the
7		Plan is not over-subscribed and that it has sufficient
8		resources to meet its obligations to existing enrollees. The
9		Board shall not limit or close enrollment for federally
10		eligible individuals.
11		e. A person shall not be eligible for coverage under the
12		Plan if:
13		(1) He or she has or obtains other coverage under a
14		group health plan or health insurance coverage
15		substantially similar to or better than a Plan policy as
16		an insured or covered dependent or would be eligible to
17		have that coverage if he or she elected to obtain it.
18		Persons otherwise eligible for Plan coverage may, however,
19		solely for the purpose of having coverage for a
20		pre-existing condition, maintain other coverage only while
21		satisfying any pre-existing condition waiting period under
22		a Plan policy or a subsequent replacement policy of a Plan
23		policy.
24		(1.1) His or her prior coverage under a group health
25		plan or health insurance coverage, provided or arranged by
26		an employer of more than 10 employees was discontinued for

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1		any reason without the entire group or plan being
2		discontinued and not replaced, provided he or she remains
3		an employee, or dependent thereof, of the same employer.
4		(2) He or she is a recipient of or is approved to
5		receive medical assistance, except that a person may
6		continue to receive medical assistance through the medical
7		assistance no grant program, but only while satisfying the
8		requirements for a preexisting condition under Section 8,
9		subsection f. of this Act. Payment of premiums pursuant to
10		this Act shall be allocable to the person's spenddown for
11		purposes of the medical assistance no grant program, but
12		that person shall not be eligible for any Plan benefits
13		while that person remains eligible for medical assistance.
14		If the person continues to receive or be approved to
15		receive medical assistance through the medical assistance
16		no grant program at or after the time that requirements
17		for a preexisting condition are satisfied, the person
18		shall not be eligible for coverage under the Plan. In that
19		circumstance, coverage under the Plan shall terminate as
20		of the expiration of the preexisting condition limitation
21		period. Under all other circumstances, coverage under the
22		Plan shall automatically terminate as of the effective
23		date of any medical assistance.
24		(3) Except as provided in Section 15, the person has
25		previously participated in the Plan and voluntarily
26		terminated Plan coverage, unless 12 months have elapsed

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1		since the person's latest voluntary termination of
2		coverage.
3		(4) The person fails to pay the required premium under
4		the covered person's terms of enrollment and
5		participation, in which event the liability of the Plan
6		shall be limited to benefits incurred under the Plan for
7		the time period for which premiums had been paid and the
8		covered person remained eligible for Plan coverage.
9		(5) The Plan has paid a total of $5,000,000 in
10		benefits on behalf of the covered person.
11		(6) The person is a resident of a public institution.
12		(7) The person's premium is paid for or reimbursed
13		under any government sponsored program or by any
14		government agency or health care provider, except as an
15		otherwise qualifying full-time employee, or dependent of
16		such employee, of a government agency or health care
17		provider or, except when a person's premium is paid by the
18		U.S. Treasury Department pursuant to the federal Trade Act
19		of 2002.
20		(8) The person has or later receives other benefits or
21		funds from any settlement, judgement, or award resulting
22		from any accident or injury, regardless of the date of the
23		accident or injury, or any other circumstances creating a
24		legal liability for damages due that person by a third
25		party, whether the settlement, judgment, or award is in
26		the form of a contract, agreement, or trust on behalf of a

SB3865 Engrossed - 516 - LRB102 24242 RJF 33473 b
1		minor or otherwise and whether the settlement, judgment,
2		or award is payable to the person, his or her dependent,
3		estate, personal representative, or guardian in a lump sum
4		or over time, so long as there continues to be benefits or
5		assets remaining from those sources in an amount in excess
6		of $300,000.
7		(9) Within the 5 years prior to the date a person's
8		Plan application is received by the Board, the person's
9		coverage under any health care benefit program as defined
10		in 18 U.S.C. 24, including any public or private plan or
11		contract under which any medical benefit, item, or service
12		is provided, was terminated as a result of any act or
13		practice that constitutes fraud under State or federal law
14		or as a result of an intentional misrepresentation of
15		material fact; or if that person knowingly and willfully
16		obtained or attempted to obtain, or fraudulently aided or
17		attempted to aid any other person in obtaining, any
18		coverage or benefits under the Plan to which that person
19		was not entitled.
20		f. The Board or the administrator shall require
21		verification of residency and may require any additional
22		information or documentation, or statements under oath, when
23		necessary to determine residency upon initial application and
24		for the entire term of the policy.
25		g. Coverage shall cease (i) on the date a person is no
26		longer a resident of Illinois, (ii) on the date a person

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1		requests coverage to end, (iii) upon the death of the covered
2		person, (iv) on the date State law requires cancellation of
3		the policy, or (v) at the Plan's option, 30 days after the Plan
4		makes any inquiry concerning a person's eligibility or place
5		of residence to which the person does not reply.
6		h. Except under the conditions set forth in subsection g
7		of this Section, the coverage of any person who ceases to meet
8		the eligibility requirements of this Section shall be
9		terminated at the end of the current policy period for which
10		the necessary premiums have been paid.
11		(Source: P.A. 96-938, eff. 6-24-10; 97-661, eff. 1-13-12.)
12		Section 105. The Religious and Charitable Risk Pooling
13		Trust Act is amended by changing Section 15 as follows:
14		(215 ILCS 150/15) (from Ch. 148, par. 215)
15		Sec. 15. Ineligible beneficiaries. A beneficiary is
16		ineligible (1) if it is not exempt from taxation under
17		paragraph (3) of subsection (c) of Section 501 of the Internal
18		Revenue Code of 1954 as amended, or an affiliate of a
19		corporation exempt from taxation under paragraph (3) of
20		subsection (c) of Section 501 of the Internal Revenue Code, as
21		amended, and exempt from taxation under paragraph (2) of
22		subsection (c) of Section 501 of the Internal Revenue Code of
23		1954, as amended, or tax exempt as a unit of local government
24		or as a hospital owned and operated by a unit of local

SB3865 Engrossed - 518 - LRB102 24242 RJF 33473 b
1		government; (2) if a corporation, it is not incorporated as a
2		not-for-profit corporation; or (3) if a foreign or
3		non-domestic alien corporation, it no longer has a Certificate
4		of Authority issued by the Secretary of State.
5		(Source: P.A. 92-99, eff. 7-20-01.)
6		Section 110. The Title Insurance Act is amended by
7		changing Sections 11 and 15.1 as follows:
8		(215 ILCS 155/11) (from Ch. 73, par. 1411)
9		Sec. 11. Statutory premium reserve.
10		(a) A domestic title insurance company shall establish and
11		maintain a statutory premium reserve computed in accordance
12		with this Section. The reserve shall be reported as a
13		liability of the title insurance company in its financial
14		statements. The statutory premium reserve shall be maintained
15		by the title insurance company for the protection of holders
16		of title insurance policies. Except as provided in this
17		Section, assets equal in value to the statutory premium
18		reserve are not subject to distribution among creditors or
19		stockholders of the title insurance company until all claims
20		of policyholders or claims under reinsurance contracts have
21		been paid in full and discharged, lawfully reinsured, or
22		otherwise assumed by another title insurance company
23		authorized to do business under this Act.
24		(b) A foreign or non-domestic alien title insurance

SB3865 Engrossed - 519 - LRB102 24242 RJF 33473 b
1		company authorized to do business under this Act shall
2		maintain at least the same reserves on title insurance
3		policies issued on properties located in this State as are
4		required of domestic title insurance companies.
5		(c) The statutory premium reserve shall consist of:
6		(1) the amount of the statutory premium reserve on
7		January 1, 1990; and
8		(2) a sum equal to 12 1/2 cents for each $1,000 of net
9		retained liability under each title insurance policy on a
10		single risk written on properties located in this State
11		after January 1, 1990.
12		(d) Amounts placed in the statutory premium reserve in any
13		year in accordance with this Section shall be deducted in
14		determining the net profit of the title insurance company for
15		that year.
16		(e) A title insurance company shall release from the
17		statutory premium reserve a sum equal to 10% of the amount
18		added to the reserve during a calendar year on July 1 of each
19		of the 5 years following the year in which the sum was added,
20		and shall release from the statutory premium reserve a sum
21		equal to 3 1/3% of the amount added to the reserve during that
22		year on each succeeding July 1 until the entire amount for that
23		year has been released. The amount of the statutory premium
24		reserve or similar premium reserve maintained before January
25		1, 1990, shall be released in accordance with the law in effect
26		before January 1, 1990.

SB3865 Engrossed - 520 - LRB102 24242 RJF 33473 b
1		(f) This reserve is independent of the deposit
2		requirements of Section 4 of this Act.
3		(Source: P.A. 94-893, eff. 6-20-06.)
4		(215 ILCS 155/15.1)
5		Sec. 15.1. No taxes to be imposed by political
6		subdivisions. The fees, charges, and taxes provided for by
7		this Act shall be in lieu of all license fees or privilege or
8		occupation taxes or other fees levied or assessed by any
9		municipality, county, or other political subdivision of this
10		State. No municipality, county, or other political subdivision
11		of this State shall impose any license fee or privilege or
12		occupation tax or fee upon any domestic, foreign, or
13		non-domestic alien company, or upon any of its agents, for the
14		privilege of doing insurance business therein. This Section
15		shall not be construed to prohibit the levy and collection of
16		State, county, or municipal taxes upon the real and personal
17		property of the company, including the tax imposed by
18		subsections (c) and (d) of Section 201 of the Illinois Income
19		Tax Act. This Section 15.1 is declared to be a denial and
20		limitation of the powers of home rule units pursuant to
21		paragraph (g) of Section 6 of Article VII of the Illinois
22		Constitution of 1970.
23		(Source: P.A. 90-317, eff. 8-1-97.)
24		Section 115. The Viatical Settlements Act of 2009 is

SB3865 Engrossed - 521 - LRB102 24242 RJF 33473 b
1		amended by changing Sections 5 and 30 as follows:
2		(215 ILCS 159/5)
3		Sec. 5. Definitions.
4		"Accredited investor" means an accredited investor as
5		defined in Rule 501(a) promulgated under the Securities Act of
6		1933 (15 U.S.C. 77 et seq.), as amended.
7		"Advertising" means any written, electronic, or printed
8		communication or any communication by means of recorded
9		telephone messages or transmitted on radio, television, the
10		Internet, or similar communications media, including film
11		strips, digital picture slides, motion pictures, and videos
12		published, disseminated, circulated, or placed before the
13		public in this State, for the purpose of creating an interest
14		in or inducing a person to sell, assign, devise, bequest, or
15		transfer the death benefit or ownership of a policy pursuant
16		to a viatical settlement contract.
17		"Non-domestic Alien licensee" means a licensee
18		incorporated or organized under the laws of any country other
19		than the United States.
20		"Business of viatical settlements" means any activity
21		involved in, but not limited to, the offering, soliciting,
22		negotiating, procuring, effectuating, purchasing, investing,
23		financing, monitoring, tracking, underwriting, selling,
24		transferring, assigning, pledging, or hypothecating or in any
25		other manner acquiring an interest in a life insurance policy

SB3865 Engrossed - 522 - LRB102 24242 RJF 33473 b
1		by means of a viatical settlement contract or other agreement.
2		"Chronically ill" means having been certified within the
3		preceding 12-month period by a licensed health professional
4		as:
5		(1) being unable to perform, without substantial
6		assistance from another individual and for at least 90
7		days due to a loss of functional capacity, at least 2
8		activities of daily living, including, but not limited to,
9		eating, toileting, transferring, bathing, dressing, or
10		continence;
11		(2) requiring substantial supervision to protect the
12		individual from threats to health and safety due to severe
13		cognitive impairment; or
14		(3) having a level of disability similar to that
15		described in paragraph (1) as determined by the Secretary
16		of Health and Human Services.
17		"Controlling person" means any person, firm, association,
18		or corporation that directly or indirectly has the power to
19		direct or cause to be directed the management, control, or
20		activities of the viatical settlement provider.
21		"Director" means the Director of the Division of Insurance
22		of the Department of Financial and Professional Regulation.
23		"Division" means the Division of Insurance of the
24		Department of Financial and Professional Regulation.
25		"Escrow agent" means an independent third-party person
26		who, pursuant to a written agreement signed by the viatical

SB3865 Engrossed - 523 - LRB102 24242 RJF 33473 b
1		settlement provider and viator, provides escrow services
2		related to the acquisition of a life insurance policy pursuant
3		to a viatical settlement contract. "Escrow agent" does not
4		include any person associated or affiliated with or under the
5		control of a licensee.
6		"Financial institution" means a financial institution as
7		defined by the Financial Institutions Insurance Sales Law in
8		Article XLIV of the Illinois Insurance Code.
9		"Financing entity" means an underwriter, placement agent,
10		lender, purchaser of securities, purchaser of a policy or
11		certificate from a viatical settlement provider, credit
12		enhancer, or an entity that has a direct ownership in a policy
13		that is the subject of a viatical settlement contract, and to
14		which both of the following apply:
15		(1) its principal activity related to the transaction
16		is providing funds to effect the viatical settlement or
17		purchase of one or more viaticated policies; and
18		(2) it has an agreement in writing with one or more
19		licensed viatical settlement providers to finance the
20		acquisition of viatical settlement contracts.
21		"Financing entity" does not include an investor that is not an
22		accredited investor.
23		"Financing transaction" means a transaction in which a
24		viatical settlement provider obtains financing from a
25		financing entity, including, without limitation, any secured
26		or unsecured financing, securitization transaction, or

SB3865 Engrossed - 524 - LRB102 24242 RJF 33473 b
1		securities offering that either is registered or exempt from
2		registration under federal and State securities law.
3		"Foreign licensee" means any viatical settlement provider
4		incorporated or organized under the laws of any state of the
5		United States other than this State.
6		"Insurance producer" means an insurance producer as
7		defined by Section 10 of Article XXXI of the Illinois
8		Insurance Code.
9		"Licensee" means a viatical settlement provider or
10		viatical settlement broker.
11		"Life expectancy provider" means a person who determines
12		or holds himself or herself out as determining life
13		expectancies or mortality ratings used to determine life
14		expectancies on behalf of or in connection with any of the
15		following:
16		(1) A viatical settlement provider, viatical
17		settlement broker, or person engaged in the business of
18		viatical settlements.
19		(2) A viatical investment as defined by Section 2.33
20		of the Illinois Securities Law of 1953 or a viatical
21		settlement contract.
22		"NAIC" means the National Association of Insurance
23		Commissioners.
24		"Person" means an individual or a legal entity, including,
25		without limitation, a partnership, limited liability company,
26		limited liability partnership, association, trust, business

SB3865 Engrossed - 525 - LRB102 24242 RJF 33473 b
1		trust, or corporation.
2		"Policy" means an individual or group policy, group
3		certificate, contract, or arrangement of insurance of the
4		class defined by subsection (a) of Section 4 of the Illinois
5		Insurance Code owned by a resident of this State, regardless
6		of whether delivered or issued for delivery in this State.
7		"Qualified institutional buyer" means a qualified
8		institutional buyer as defined in Rule 144 promulgated under
9		the Securities Act of 1933, as amended.
10		"Related provider trust" means a titling trust or other
11		trust established by a licensed viatical settlement provider
12		or a financing entity for the sole purpose of holding the
13		ownership or beneficial interest in purchased policies in
14		connection with a financing transaction. The trust shall have
15		a written agreement with the licensed viatical settlement
16		provider under which the licensed viatical settlement provider
17		is responsible for ensuring compliance with all statutory and
18		regulatory requirements and under which the trust agrees to
19		make all records and files related to viatical settlement
20		transactions available to the Director as if those records and
21		files were maintained directly by the licensed viatical
22		settlement provider.
23		"Special purpose entity" means a corporation, partnership,
24		trust, limited liability company, or other similar entity
25		formed only to provide, directly or indirectly, access to
26		institutional capital markets (i) for a financing entity or

SB3865 Engrossed - 526 - LRB102 24242 RJF 33473 b
1		licensed viatical settlement provider; or (ii) in connection
2		with a transaction in which the securities in the special
3		purposes entity are acquired by the viator or by qualified
4		institutional buyers or the securities pay a fixed rate of
5		return commensurate with established asset-backed
6		institutional capital markets.
7		"Stranger-originated life insurance" or "STOLI" means an
8		act, practice, or arrangement to initiate a life insurance
9		policy for the benefit of a third-party investor who, at the
10		time of policy origination, has no insurable interest in the
11		insured. STOLI practices include, but are not limited to,
12		cases in which life insurance is purchased with resources or
13		guarantees from or through a person or entity who, at the time
14		of policy inception, could not lawfully initiate the policy
15		himself or itself and where, at the time of policy inception,
16		there is an arrangement or agreement, whether verbal or
17		written, to directly or indirectly transfer the ownership of
18		the policy or policy benefits to a third party. Trusts created
19		to give the appearance of an insurable interest and used to
20		initiate policies for investors violate insurance interest
21		laws and the prohibition against wagering on life. STOLI
22		arrangements do not include lawful viatical settlement
23		contracts as permitted by this Act.
24		"Terminally ill" means certified by a physician as having
25		an illness or physical condition that reasonably is expected
26		to result in death in 24 months or less.

SB3865 Engrossed - 527 - LRB102 24242 RJF 33473 b
1		"Viatical settlement broker" means a licensed insurance
2		producer who has been issued a license pursuant to paragraph
3		(1) or (2) of subsection (a) of Section 500-35 of the Illinois
4		Insurance Code who, working exclusively on behalf of a viator
5		and for a fee, commission, or other valuable consideration,
6		offers, solicits, promotes, or attempts to negotiate viatical
7		settlement contracts between a viator and one or more viatical
8		settlement providers or one or more viatical settlement
9		brokers. "Viatical settlement broker" does not include an
10		attorney, certified public accountant, or a financial planner
11		accredited by a nationally recognized accreditation agency,
12		who is retained to represent the viator and whose compensation
13		is not paid directly or indirectly by the viatical settlement
14		provider or purchaser.
15		"Viatical settlement contract" means any of the following:
16		(1) A written agreement between a viator and a
17		viatical settlement provider establishing the terms under
18		which compensation or anything of value is or will be
19		paid, which compensation or value is less than the
20		expected death benefits of the policy, in return for the
21		viator's present or future assignment, transfer, sale,
22		devise, or bequest of the death benefit or ownership of
23		any portion of the insurance policy.
24		(2) A written agreement for a loan or other lending
25		transaction, secured primarily by an individual life
26		insurance policy or an individual certificate of a group

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1		life insurance policy.
2		(3) The transfer for compensation or value of
3		ownership of a beneficial interest in a trust or other
4		entity that owns such policy, if the trust or other entity
5		was formed or availed of for the principal purpose of
6		acquiring one or more life insurance contracts and the
7		life insurance contract insures the life of a person
8		residing in this State.
9		(4) A premium finance loan made for a life insurance
10		policy by a lender to a viator on, before, or after the
11		date of issuance of the policy in either of the following
12		situations:
13		(A) The viator or the insured receives a guarantee
14		of the viatical settlement value of the policy.
15		(B) The viator or the insured agrees to sell the
16		policy or any portion of the policy's death benefit on
17		any date before or after issuance of the policy.
18		"Viatical settlement contract" does not include any of the
19		following acts, practices, or arrangements listed below in
20		subparagraphs (a) through (i) of this definition of "viatical
21		settlement contract", unless part of a plan, scheme, device,
22		or artifice to avoid application of this Act; provided,
23		however, that the list of excluded items contained in
24		subparagraphs (a) through (i) is not intended to be an
25		exhaustive list and that an act, practice, or arrangement that
26		is not described below in subparagraphs (a) through (i) does

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1		not necessarily constitute a viatical settlement contract:
2		(a) A policy loan or accelerated death benefit made by
3		the insurer pursuant to the policy's terms;
4		(b) Loan proceeds that are used solely to pay: (i)
5		premiums for the policy and (ii) the costs of the loan,
6		including, without limitation, interest, arrangement fees,
7		utilization fees and similar fees, closing costs, legal
8		fees and expenses, trustee fees and expenses, and third
9		party collateral provider fees and expenses, including
10		fees payable to letter of credit issuers;
11		(c) A loan made by a bank or other financial
12		institution in which the lender takes an interest in a
13		life insurance policy solely to secure repayment of a loan
14		or, if there is a default on the loan and the policy is
15		transferred, the transfer of such a policy by the lender,
16		provided that neither the default itself nor the transfer
17		of the policy in connection with the default is pursuant
18		to an agreement or understanding with any other person for
19		the purpose of evading regulation under this Act;
20		(d) A loan made by a lender that does not violate
21		Article XXXIIa of the Illinois Insurance Code, provided
22		that the premium finance loan is not described in this
23		Act;
24		(e) An agreement in which all the parties (i) are
25		closely related to the insured by blood or law or (ii) have
26		a lawful substantial economic interest in the continued

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1		life, health, and bodily safety of the person insured, or
2		trusts established primarily for the benefit of such
3		parties;
4		(f) Any designation, consent, or agreement by an
5		insured who is an employee of an employer in connection
6		with the purchase by the employer, or trust established by
7		the employer, of life insurance on the life of the
8		employee;
9		(g) A bona fide business succession planning
10		arrangement: (i) between one or more shareholders in a
11		corporation or between a corporation and one or more of
12		its shareholders or one or more trusts established by its
13		shareholders; (ii) between one or more partners in a
14		partnership or between a partnership and one or more of
15		its partners or one or more trusts established by its
16		partners; or (iii) between one or more members in a
17		limited liability company or between a limited liability
18		company and one or more of its members or one or more
19		trusts established by its members;
20		(h) An agreement entered into by a service recipient,
21		or a trust established by the service recipient, and a
22		service provider, or a trust established by the service
23		provider, who performs significant services for the
24		service recipient's trade or business; or
25		(i) Any other contract, transaction, or arrangement
26		exempted from the definition of viatical settlement

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1		contract by the Director based on the Director's
2		determination that the contract, transaction, or
3		arrangement is not of the type intended to be regulated by
4		this Act.
5		"Viatical settlement investment agent" means a person who
6		is an appointed or contracted agent of a licensed viatical
7		settlement provider who solicits or arranges the funding for
8		the purchase of a viatical settlement by a viatical settlement
9		purchaser and who is acting on behalf of a viatical settlement
10		provider. A viatical settlement investment agent is deemed to
11		represent the viatical settlement provider of whom the
12		viatical settlement investment agent is an appointed or
13		contracted agent.
14		"Viatical settlement provider" means a person, other than
15		a viator, who enters into or effectuates a viatical settlement
16		contract with a viator. "Viatical settlement provider" does
17		not include:
18		(1) a bank, savings bank, savings and loan
19		association, credit union, or other financial institution
20		that takes an assignment of a policy as collateral for a
21		loan;
22		(2) a financial institution or premium finance company
23		making premium finance loans and exempted by the Director
24		from the licensing requirement under the premium finance
25		laws where the institution or company takes an assignment
26		of a life insurance policy solely as collateral for a

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1		premium finance loan;
2		(3) the issuer of the life insurance policy;
3		(4) an authorized or eligible insurer that provides
4		stop loss coverage or financial guaranty insurance to a
5		viatical settlement provider, purchaser, financing entity,
6		special purpose entity, or related provider trust;
7		(5) An individual person who enters into or
8		effectuates no more than one viatical settlement contract
9		in a calendar year for the transfer of policies for any
10		value less than the expected death benefit;
11		(6) a financing entity;
12		(7) a special purpose entity;
13		(8) a related provider trust;
14		(9) a viatical settlement purchaser; or
15		(10) any other person that the Director determines is
16		consistent with the definition of viatical settlement
17		provider.
18		"Viatical settlement purchaser" means a person who
19		provides a sum of money as consideration for a life insurance
20		policy or an interest in the death benefits of a life insurance
21		policy, or a person who owns or acquires or is entitled to a
22		beneficial interest in a trust that owns a viatical settlement
23		contract or is the beneficiary of a life insurance policy, in
24		each case where such policy has been or will be the subject of
25		a viatical settlement contract, for the purpose of deriving an
26		economic benefit. "Viatical settlement purchaser" does not

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1		include: (i) a licensee under this Act; (ii) an accredited
2		investor or qualified institutional buyer; (iii) a financing
3		entity; (iv) a special purpose entity; or (v) a related
4		provider trust.
5		"Viaticated policy" means a life insurance policy that has
6		been acquired by a viatical settlement provider pursuant to a
7		viatical settlement contract.
8		"Viator" means the owner of a life insurance policy or a
9		certificate holder under a group policy who enters or seeks to
10		enter into a viatical settlement contract. For the purposes of
11		this Act, a viator is not limited to an owner of a life
12		insurance policy or a certificate holder under a group policy
13		insuring the life of an individual with a terminal or chronic
14		illness or condition, except where specifically addressed.
15		"Viator" does not include:
16		(1) a licensee;
17		(2) a qualified institutional buyer;
18		(3) a financing entity;
19		(4) a special purpose entity; or
20		(5) a related provider trust.
21		(Source: P.A. 100-863, eff. 8-14-18.)
22		(215 ILCS 159/30)
23		Sec. 30. Examination or investigation.
24		(a) The Director may when and as often as the Director
25		deems it reasonably necessary to protect the interests of the

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1		public, examine the business affairs of any licensee.
2		In scheduling and determining the nature, scope, and
3		frequency of the examinations, the Director shall consider
4		such matters as consumer complaints, results of financial
5		statement analyses and ratios, changes in management or
6		ownership, actuarial opinions, report of independent certified
7		public accountants, and other relevant criteria as determined
8		by the Director.
9		(b) For purposes of completing an examination of a
10		licensee under this Act, the Director may examine or
11		investigate any person, or the business of any person, in so
12		far as the examination or investigation is, in the sole
13		discretion of the Director, necessary or material to the
14		examination.
15		(c) In lieu of an examination under this Act of any foreign
16		licensee or non-domestic alien licensee licensed in this
17		State, the Director may, at the Director's discretion, accept
18		an examination report on the licensee as prepared by the chief
19		insurance regulatory official for the licensee's state of
20		domicile or port-of-entry state.
21		(d) As far as practical, the examination of a foreign
22		licensee or non-domestic alien licensee shall be made in
23		cooperation with the insurance supervisory officials of other
24		states in which the licensee transacts business.
25		(e) Licensees shall for 5 years retain copies of:
26		(1) all proposed, offered, or executed contracts,

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1		purchase agreements, underwriting documents, policy forms,
2		and applications from the date of the proposal, offer, or
3		execution of the contract or purchase agreement, whichever
4		is later;
5		(2) all checks, drafts, or other evidence and
6		documentation related to the payment, transfer, deposit,
7		or release of funds from the date of the transaction;
8		(3) all other records and documents in any format
9		related to the requirements of this Act, including a
10		record of complaints received against the licensee and
11		agents representing the licensee and a list of all life
12		expectancy providers that have provider services to the
13		licensee.
14		This subsection (e) does not relieve a person of the
15		obligation to produce records required by this subsection to
16		the Director after the retention period has expired if the
17		person has retained the documents.
18		Records required to be retained by this subsection (e)
19		must be legible and complete and may be retained in paper,
20		photograph, microprocessor, magnetic, mechanical, or
21		electronic media, or by any process that accurately reproduces
22		or forms a durable medium for the reproduction of a record.
23		(f) Upon determining that an examination should be
24		conducted, the Director shall appoint one or more examiners to
25		perform the examination and instruct them as to the scope of
26		the examination. The Director may employ any guidelines or

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1		procedures for purposes of this subsection (f) that the
2		Director deems appropriate.
3		Every licensee or person, including all officers,
4		partners, members, directors, employees, controlling persons,
5		and agents of any licensee or person, from whom information is
6		sought shall provide to the examiners timely, convenient, and
7		free access at all reasonable hours at the licensee's or
8		person's offices to all books, records, accounts, papers,
9		documents, assets, and computer or other recordings relating
10		to the property, assets, business, and affairs of the licensee
11		being examined. The officers, directors, employees, and agents
12		of the licensee or person shall facilitate the examination and
13		aid in the examination so far as it is in their power to do so.
14		The refusal of a licensee by its officers, directors,
15		employees, or agents to submit to examination or to comply
16		with any reasonable written request of the Director shall be
17		grounds for revocation, denial of issuance, or non-renewal of
18		any license or authority held by the licensee to engage in the
19		viatical settlement business or other business subject to the
20		Director's jurisdiction.
21		The Director shall have the power to issue subpoenas, to
22		administer oaths, and to examine under oath any person as to
23		any matter pertinent to the examination. Upon the failure or
24		refusal of a person to obey a subpoena, the Director may
25		petition a court of competent jurisdiction, and upon proper
26		showing, the court may enter an order compelling the witness

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1		to appear and testify or produce documentary evidence. Failure
2		to obey the court order shall be punishable as contempt of
3		court. Subpoenas may be enforced pursuant to Section 403 of
4		the Illinois Insurance Code.
5		When making an examination under this Act, the Director
6		may retain attorneys, appraisers, independent actuaries,
7		independent certified public accountants, or other
8		professionals and specialists as examiners, the reasonable
9		cost of which shall be borne by the licensee that is the
10		subject of the examination.
11		(g) Nothing contained in this Act limits the Director's
12		authority to terminate or suspend an examination in order to
13		pursue other legal or regulatory action pursuant to the
14		insurance laws of this State. Findings of fact and conclusions
15		made pursuant to any examination shall be prima facie evidence
16		in any legal or regulatory action.
17		(h) Nothing contained in this Act shall be construed to
18		limit the Director's authority to use and, if appropriate, to
19		make public any final or preliminary examination report, any
20		examiner or licensee workpapers or other documents, or any
21		other information discovered or developed during the course of
22		any examination in the furtherance of any legal or regulatory
23		action that the Director may, in the Director's discretion,
24		deem appropriate.
25		(i) No later than 60 days following completion of the
26		examination, the examiner in charge shall file with the

SB3865 Engrossed - 538 - LRB102 24242 RJF 33473 b
1		Director a verified written report of examination under oath.
2		Upon receipt of the verified report, the Director shall
3		transmit the report to the licensee examined.
4		(j) Examination reports shall be comprised only of facts
5		appearing upon the books, records, or other documents of the
6		licensee, its agents, or other persons examined, or as
7		ascertained from the testimony of its officers or agents or
8		other persons examined concerning its affairs and the
9		conclusions and recommendations that the examiners find
10		reasonably warranted from the facts.
11		(k) The licensee may request a hearing within 10 days
12		after receipt of the examination report by giving the Director
13		written notice of that request, together with a statement of
14		its objections. The Director then must conduct a hearing in
15		conjunction with Sections 402 and 403 of the Illinois
16		Insurance Code. The Director must issue a written order based
17		upon the examination report and upon the hearing within 90
18		days after the report is filed or within 90 days after the
19		hearing. After the hearing, the Director may make such order
20		or orders as may be reasonably necessary to correct,
21		eliminate, or remedy unlawful conduct.
22		(l) If the Director determines that regulatory action is
23		appropriate as a result of an examination, the Director may
24		initiate any proceedings or actions provided by law.
25		(m) Names and individual identification data for all
26		viators in the possession and control of the Director shall be

SB3865 Engrossed - 539 - LRB102 24242 RJF 33473 b
1		considered private and confidential and shall not be disclosed
2		by the Director unless required by law.
3		Except as otherwise provided in this Act, all examination
4		reports, working papers, recorded information, documents, and
5		copies thereof produced by, obtained by or disclosed to the
6		Director or any other person in the course of an examination
7		made under this Act or the law of another state or jurisdiction
8		that is substantially similar to this Act, or in the course of
9		analysis or investigation by the Director of the financial
10		condition or market conduct of a licensee are (i) confidential
11		by law and privileged, (ii) not subject to the Freedom of
12		Information Act, (iii) not subject to subpoena, and (iv) not
13		subject to discovery or admissible in evidence in any private
14		civil action.
15		The Director is authorized to use the documents,
16		materials, or other information in the furtherance of any
17		regulatory or legal action brought as part of the Director's
18		official duties.
19		Documents, materials, or other information, including, but
20		not limited to, all working papers and copies thereof, in the
21		possession or control of the NAIC and its affiliates and
22		subsidiaries are:
23		(1) confidential by law and privileged;
24		(2) not subject to subpoena; and
25		(3) not subject to discovery or admissible in evidence
26		in any private civil action if they are:

SB3865 Engrossed - 540 - LRB102 24242 RJF 33473 b
1		(A) created, produced or obtained by, or disclosed
2		to the NAIC and its affiliates and subsidiaries in the
3		course of assisting an examination made under this Act
4		or assisting the Director or the chief insurance
5		regulatory official in another state in the analysis
6		or investigation of the financial condition or market
7		conduct of a licensee; or
8		(B) disclosed under this subsection (m) by the
9		Director or disclosed under a comparable provision in
10		law of another state by that state's chief insurance
11		regulatory official to the NAIC and its affiliates and
12		subsidiaries.
13		Neither the Director nor any person that received the
14		documents, material, or other information while acting under
15		the authority of the Director, including the NAIC and its
16		affiliates and subsidiaries, shall be permitted to testify in
17		any private civil action concerning any confidential
18		documents, materials, or information subject to this
19		subsection (m).
20		(n) In order to assist in the performance of the
21		Director's duties, the Director may:
22		(1) share documents, materials, or other information,
23		including the confidential and privileged documents,
24		materials, or information subject to subsection (m) of
25		this Section, with other state, federal, and international
26		regulatory agencies, with the NAIC and its affiliates and

SB3865 Engrossed - 541 - LRB102 24242 RJF 33473 b
1		subsidiaries, and with state, federal, and international
2		law enforcement authorities, provided that the recipient
3		agrees to maintain the confidentiality and privileged
4		status of the document, material, communication, or other
5		information;
6		(2) receive documents, materials, communications, or
7		information, including otherwise confidential and
8		privileged documents, materials, or information, from the
9		NAIC and its affiliates and subsidiaries and from
10		regulatory and law enforcement officials of other foreign
11		or domestic jurisdictions, and shall maintain as
12		confidential or privileged any document, material, or
13		information received with notice or the understanding that
14		it is confidential or privileged under the laws of the
15		jurisdiction that is the source of the document, material,
16		or information; and
17		(3) enter into agreements governing sharing and use of
18		information consistent with this Section.
19		(o) No waiver of any applicable privilege or claim of
20		confidentiality in the documents, materials, or information
21		shall occur as a result of disclosure to the Director under
22		this Section or as a result of sharing as authorized in
23		subsection (n) of this Section.
24		(p) A privilege established under the law of any state or
25		jurisdiction that is substantially similar to the privilege
26		established under this Section shall be available and enforced

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1		in any proceeding in, and in any court of, this State.
2		(q) Nothing contained in this Act prevents or prohibits
3		the Director from disclosing the content of an examination
4		report, preliminary examination report or results, or any
5		matter relating to those reports or results, to the chief
6		insurance regulatory official of any other state or country,
7		or to law enforcement officials of this or any other state or
8		agency of the federal government at any time or to the NAIC, if
9		the agency or office receiving the report or matters relating
10		to it agrees in writing to hold it confidential and in a manner
11		consistent with this Act.
12		(r) The expenses incurred in conducting an examination
13		shall be paid by the licensee.
14		(s) No cause of action shall arise nor shall any liability
15		be imposed against the Director, the Director's authorized
16		representatives, or any examiner appointed by the Director for
17		any statements made or conduct performed in good faith while
18		carrying out the provisions of this Act.
19		No cause of action shall arise, nor shall any liability be
20		imposed against any person for the act of communicating or
21		delivering information or data to the Director or the
22		Director's authorized representative or examiner pursuant to
23		an examination made under this Section, if the act of
24		communication or delivery was performed in good faith and
25		without fraudulent intent or the intent to deceive. This
26		subsection (s) does not abrogate or modify in any way any

SB3865 Engrossed - 543 - LRB102 24242 RJF 33473 b
1		common law or statutory privilege or immunity heretofore
2		enjoyed by any person identified in this subsection (s).
3		A person identified in this subsection (s) shall be
4		entitled to an award of attorney's fees and costs if he or she
5		is the prevailing party in a civil cause of action for libel,
6		slander, or any other relevant tort arising out of activities
7		in carrying out the provisions of this Section and the party
8		bringing the action was not substantially justified in doing
9		so. For purposes of this Section, a proceeding is
10		"substantially justified" if it had a reasonable basis in law
11		or fact at the time that it was initiated.
12		(t) The Director may investigate suspected viatical
13		settlement fraud and persons engaged in the business of
14		viatical settlements.
15		(Source: P.A. 96-736, eff. 7-1-10.)
16		Section 120. The Hearing Instrument Consumer Protection
17		Act is amended by changing Section 8 as follows:
18		(225 ILCS 50/8) (from Ch. 111, par. 7408)
19		(Section scheduled to be repealed on January 1, 2026)
20		Sec. 8. Applicant qualifications; examination.
21		(a) In order to protect persons who are deaf or hard of
22		hearing, the Department shall authorize or shall conduct an
23		appropriate examination, which may be the International
24		Hearing Society's licensure examination, for persons who

SB3865 Engrossed - 544 - LRB102 24242 RJF 33473 b
1		dispense, test, select, recommend, fit, or service hearing
2		instruments. The frequency of holding these examinations shall
3		be determined by the Department by rule. Those who
4		successfully pass such an examination shall be issued a
5		license as a hearing instrument dispenser, which shall be
6		effective for a 2-year period.
7		(b) Applicants shall be:
8		(1) at least 18 years of age;
9		(2) of good moral character;
10		(3) the holder of an associate's degree or the
11		equivalent;
12		(4) free of contagious or infectious disease; and
13		(5) a citizen or person who has the status as a legal
14		noncitizen alien.
15		Felony convictions of the applicant and findings against
16		the applicant involving matters set forth in Sections 17 and
17		18 shall be considered in determining moral character, but
18		such a conviction or finding shall not make an applicant
19		ineligible to register for examination.
20		(c) Prior to engaging in the practice of fitting,
21		dispensing, or servicing hearing instruments, an applicant
22		shall demonstrate, by means of written and practical
23		examinations, that such person is qualified to practice the
24		testing, selecting, recommending, fitting, selling, or
25		servicing of hearing instruments as defined in this Act. An
26		applicant must obtain a license within 12 months after passing

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1		either the written or practical examination, whichever is
2		passed first, or must take and pass those examinations again
3		in order to be eligible to receive a license.
4		The Department shall, by rule, determine the conditions
5		under which an individual is examined.
6		(d) Proof of having met the minimum requirements of
7		continuing education as determined by the Board shall be
8		required of all license renewals. Pursuant to rule, the
9		continuing education requirements may, upon petition to the
10		Board, be waived in whole or in part if the hearing instrument
11		dispenser can demonstrate that he or she served in the Coast
12		Guard or Armed Forces, had an extreme hardship, or obtained
13		his or her license by examination or endorsement within the
14		preceding renewal period.
15		(e) Persons applying for an initial license must
16		demonstrate having earned, at a minimum, an associate degree
17		or its equivalent from an accredited institution of higher
18		education that is recognized by the U.S. Department of
19		Education or that meets the U.S. Department of Education
20		equivalency as determined through a National Association of
21		Credential Evaluation Services (NACES) member, and meet the
22		other requirements of this Section. In addition, the applicant
23		must demonstrate the successful completion of (1) 12 semester
24		hours or 18 quarter hours of academic undergraduate course
25		work in an accredited institution consisting of 3 semester
26		hours of anatomy and physiology of the hearing mechanism, 3

SB3865 Engrossed - 546 - LRB102 24242 RJF 33473 b
1		semester hours of hearing science, 3 semester hours of
2		introduction to audiology, and 3 semester hours of aural
3		rehabilitation, or the quarter hour equivalent or (2) an
4		equivalent program as determined by the Department that is
5		consistent with the scope of practice of a hearing instrument
6		dispenser as defined in Section 3 of this Act. Persons
7		licensed before January 1, 2003 who have a valid license on
8		that date may have their license renewed without meeting the
9		requirements of this subsection.
10		(Source: P.A. 98-827, eff. 1-1-15; 99-204, eff. 7-30-15;
11		99-847, eff. 8-19-16.)
12		Section 125. The Appraisal Management Company Registration
13		Act is amended by changing Section 10 as follows:
14		(225 ILCS 459/10)
15		Sec. 10. Definitions. In this Act:
16		"Address of record" means the principal address recorded
17		by the Department in the applicant's or registrant's
18		application file or registration file maintained by the
19		Department's registration maintenance unit.
20		"Applicant" means a person or entity who applies to the
21		Department for a registration under this Act.
22		"Appraisal" means (noun) the act or process of developing
23		an opinion of value; an opinion of value (adjective) of or
24		pertaining to appraising and related functions.

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1		"Appraisal firm" means an appraisal entity that is 100%
2		owned and controlled by a person or persons licensed in
3		Illinois as a certified general real estate appraiser or a
4		certified residential real estate appraiser. An appraisal firm
5		does not include an appraisal management company.
6		"Appraisal management company" means any corporation,
7		limited liability company, partnership, sole proprietorship,
8		subsidiary, unit, or other business entity that directly or
9		indirectly: (1) provides appraisal management services to
10		creditors or secondary mortgage market participants, including
11		affiliates; (2) provides appraisal management services in
12		connection with valuing the consumer's principal dwelling as
13		security for a consumer credit transaction (including consumer
14		credit transactions incorporated into securitizations); and
15		(3) any appraisal management company that, within a given
16		12-month period, oversees an appraiser panel of 16 or more
17		State-certified appraisers in Illinois or 25 or more
18		State-certified or State-licensed appraisers in 2 or more
19		jurisdictions. "Appraisal management company" includes a
20		hybrid entity.
21		"Appraisal management company national registry fee" means
22		the fee implemented pursuant to Title XI of the federal
23		Financial Institutions Reform, Recovery, and Enforcement Act
24		of 1989 for an appraiser management company's national
25		registry.
26		"Appraisal management services" means one or more of the

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1		following:
2		(1) recruiting, selecting, and retaining appraisers;
3		(2) contracting with State-certified or State-licensed
4		appraisers to perform appraisal assignments;
5		(3) managing the process of having an appraisal
6		performed, including providing administrative services
7		such as receiving appraisal orders and appraisal reports;
8		submitting completed appraisal reports to creditors and
9		secondary market participants; collecting compensation
10		from creditors, underwriters, or secondary market
11		participants for services provided; or paying appraisers
12		for services performed; or
13		(4) reviewing and verifying the work of appraisers.
14		"Appraiser panel" means a network, list, or roster of
15		licensed or certified appraisers approved by the appraisal
16		management company or by the end-user client to perform
17		appraisals as independent contractors for the appraisal
18		management company. "Appraiser panel" includes both appraisers
19		accepted by an appraisal management company for consideration
20		for future appraisal assignments and appraisers engaged by an
21		appraisal management company to perform one or more
22		appraisals. For the purposes of determining the size of an
23		appraiser panel, only independent contractors of hybrid
24		entities shall be counted towards the appraiser panel.
25		"Appraiser panel fee" means the amount collected from a
26		registrant that, where applicable, includes an appraisal

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1		management company's national registry fee.
2		"Appraisal report" means a written appraisal by an
3		appraiser to a client.
4		"Appraisal practice service" means valuation services
5		performed by an individual acting as an appraiser, including,
6		but not limited to, appraisal or appraisal review.
7		"Appraisal subcommittee" means the appraisal subcommittee
8		of the Federal Financial Institutions Examination Council as
9		established by Title XI.
10		"Appraiser" means a person who performs real estate or
11		real property appraisals.
12		"Assignment result" means an appraiser's opinions and
13		conclusions developed specific to an assignment.
14		"Audit" includes, but is not limited to, an annual or
15		special audit, visit, or review necessary under this Act or
16		required by the Secretary or the Secretary's authorized
17		representative in carrying out the duties and responsibilities
18		under this Act.
19		"Client" means the party or parties who engage an
20		appraiser by employment or contract in a specific appraisal
21		assignment.
22		"Controlling person" means:
23		(1) an owner, officer, or director of an entity
24		seeking to offer appraisal management services;
25		(2) an individual employed, appointed, or authorized
26		by an appraisal management company who has the authority

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1		to:
2		(A) enter into a contractual relationship with a
3		client for the performance of an appraisal management
4		service or appraisal practice service; and
5		(B) enter into an agreement with an appraiser for
6		the performance of a real estate appraisal activity;
7		(3) an individual who possesses, directly or
8		indirectly, the power to direct or cause the direction of
9		the management or policies of an appraisal management
10		company; or
11		(4) an individual who will act as the sole compliance
12		officer with regard to this Act and any rules adopted
13		under this Act.
14		"Covered transaction" means a consumer credit transaction
15		secured by a consumer's principal dwelling.
16		"Department" means the Department of Financial and
17		Professional Regulation.
18		"Email address of record" means the designated email
19		address recorded by the Department in the applicant's
20		application file or the registrant's registration file
21		maintained by the Department's registration maintenance unit.
22		"Entity" means a corporation, a limited liability company,
23		partnership, a sole proprietorship, or other entity providing
24		services or holding itself out to provide services as an
25		appraisal management company or an appraisal management
26		service.

SB3865 Engrossed - 551 - LRB102 24242 RJF 33473 b
1		"End-user client" means any person who utilizes or engages
2		the services of an appraiser through an appraisal management
3		company.
4		"Federally regulated appraisal management company" means
5		an appraisal management company that is owned and controlled
6		by an insured depository institution, as defined in 12 U.S.C.
7		1813, or an insured credit union, as defined in 12 U.S.C. 1752,
8		and regulated by the Office of the Comptroller of the
9		Currency, the Federal Reserve Board, the National Credit Union
10		Association, or the Federal Deposit Insurance Corporation.
11		"Financial institution" means any bank, savings bank,
12		savings and loan association, credit union, mortgage broker,
13		mortgage banker, registrant under the Consumer Installment
14		Loan Act or the Sales Finance Agency Act, or a corporate
15		fiduciary, subsidiary, affiliate, parent company, or holding
16		company of any registrant, or any institution involved in real
17		estate financing that is regulated by State or federal law.
18		"Foreign appraisal management company" means any appraisal
19		management company organized under the laws of any other state
20		of the United States, the District of Columbia, or any other
21		jurisdiction of the United States.
22		"Hybrid entity" means an appraisal management company that
23		hires an appraiser as an employee to perform an appraisal and
24		engages an independent contractor to perform an appraisal.
25		"Multi-state licensing system" means a web-based platform
26		that allows an applicant to submit the application or

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1		registration renewal to the Department online.
2		"Person" means individuals, entities, sole
3		proprietorships, corporations, limited liability companies,
4		and non-domestic alien, foreign, or domestic partnerships,
5		except that when the context otherwise requires, the term may
6		refer to a single individual or other described entity.
7		"Principal dwelling" means a residential structure that
8		contains one to 4 units, whether or not that structure is
9		attached to real property. "Principal dwelling" includes an
10		individual condominium unit, cooperative unit, manufactured
11		home, mobile home, and trailer, if it is used as a residence.
12		"Principal office" means the actual, physical business
13		address, which shall not be a post office box or a virtual
14		business address, of a registrant, at which (i) the Department
15		may contact the registrant and (ii) records required under
16		this Act are maintained.
17		"Qualified to transact business in this State" means being
18		in compliance with the requirements of the Business
19		Corporation Act of 1983.
20		"Quality control review" means a review of an appraisal
21		report for compliance and completeness, including grammatical,
22		typographical, or other similar errors, unrelated to
23		developing an opinion of value.
24		"Real estate" means an identified parcel or tract of land,
25		including any improvements.
26		"Real estate related financial transaction" means any

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1		transaction involving:
2		(1) the sale, lease, purchase, investment in, or
3		exchange of real property, including interests in property
4		or the financing thereof;
5		(2) the refinancing of real property or interests in
6		real property; and
7		(3) the use of real property or interest in property
8		as security for a loan or investment, including mortgage
9		backed securities.
10		"Real property" means the interests, benefits, and rights
11		inherent in the ownership of real estate.
12		"Secretary" means the Secretary of Financial and
13		Professional Regulation.
14		"USPAP" means the Uniform Standards of Professional
15		Appraisal Practice as adopted by the Appraisal Standards Board
16		under Title XI.
17		"Valuation" means any estimate of the value of real
18		property in connection with a creditor's decision to provide
19		credit, including those values developed under a policy of a
20		government sponsored enterprise or by an automated valuation
21		model or other methodology or mechanism.
22		"Written notice" means a communication transmitted by mail
23		or by electronic means that can be verified between an
24		appraisal management company and a licensed or certified real
25		estate appraiser.
26		(Source: P.A. 102-20, eff. 1-1-22; 102-687, eff. 12-17-21.)

SB3865 Engrossed - 554 - LRB102 24242 RJF 33473 b
1		Section 130. The Illinois Public Aid Code is amended by
2		changing Section 5-3 as follows:
3		(305 ILCS 5/5-3) (from Ch. 23, par. 5-3)
4		Sec. 5-3. Residence.) Any person who has established his
5		residence in this State and lives therein, including any
6		person who is a migrant worker, may qualify for medical
7		assistance. A person who, while temporarily in this State,
8		suffers injury or illness endangering his life and health and
9		necessitating emergency care, may also qualify.
10		Temporary absence from the State shall not disqualify a
11		person from maintaining his eligibility under this Article.
12		As used in this Section, "migrant worker" means any person
13		residing temporarily and employed in Illinois who moves
14		seasonally from one place to another for the purpose of
15		employment in agricultural activities, including the planting,
16		raising or harvesting of any agricultural or horticultural
17		commodities and the handling, packing or processing of such
18		commodities on the farm where produced or at the point of first
19		processing, in animal husbandry, or in other activities
20		connected with the care of animals. Dependents of such person
21		shall be considered eligible if they are living with the
22		person during his or her temporary residence and employment in
23		Illinois.
24		In order to be eligible for medical assistance under this

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1		section, each migrant worker shall show proof of citizenship
2		or legal noncitizen alien status.
3		(Source: P.A. 81-746.)
4		Section 135. The Housing Development and Construction Act
5		is amended by changing Section 5 as follows:
6		(310 ILCS 20/5) (from Ch. 67 1/2, par. 57)
7		Sec. 5. Any grants paid hereunder to a housing authority
8		shall be deposited in a separate fund and, subject to the
9		approval of the Department of Commerce and Economic
10		Opportunity, may be used for any or all of the following
11		purposes as the needs of the community may require: the
12		acquisition of land by purchase, gift or condemnation and the
13		improvement thereof, the purchase and installation of
14		temporary housing facilities, the construction of housing
15		units for rent or sale to veterans, the families of deceased
16		servicemen, and for persons and families who by reason of
17		overcrowded housing conditions or displacement by eviction,
18		fires or other calamities, or slum clearance or other private
19		or public project involving relocation, are in urgent need of
20		safe and sanitary housing, the making of grants in connection
21		with the sale or lease of real property as provided in the
22		following paragraph of this section, and for any and all
23		purposes authorized by the "Housing Authorities Act," approved
24		March 19, 1934, as amended, including administrative expenses

SB3865 Engrossed - 556 - LRB102 24242 RJF 33473 b
1		of the housing authorities in relation to the aforesaid
2		objectives, to the extent and for the purposes authorized and
3		approved by the Department of Commerce and Economic
4		Opportunity. Each housing authority is vested with power to
5		exercise the right of eminent domain for the purposes
6		authorized by this Act. Condemnation proceedings instituted by
7		any such authority shall be in all respects in the manner
8		provided for the exercise of the right of eminent domain under
9		the Eminent Domain Act.
10		In addition to the foregoing, and for the purpose of
11		facilitating the development and construction of housing,
12		housing authorities may, with the approval of the Department
13		of Commerce and Economic Opportunity, enter into contracts and
14		agreements for the sale or lease of real property acquired by
15		the Authority through the use of the grant hereunder, and may
16		sell or lease such property to (1) housing corporations
17		operating under "An Act in relation to housing," approved July
18		12, 1933, as amended; (2) neighborhood redevelopment
19		corporations operating under the "Neighborhood Redevelopment
20		Corporation Law," approved July 9, 1941; (3) insurance
21		companies operating under Article VIII of the Illinois
22		Insurance Code; (4) non-profit corporations organized for the
23		purpose of constructing, managing and operating housing
24		projects and the improvement of housing conditions, including
25		the sale or rental of housing units to persons in need thereof;
26		or (5) to any other individual, association or corporation,

SB3865 Engrossed - 557 - LRB102 24242 RJF 33473 b
1		including bona fide housing cooperatives, desiring to engage
2		in a development or redevelopment project. The term
3		"corporation" as used in this section, means a corporation
4		organized under the laws of this or any other state of the
5		United States, or of any country, which may legally make
6		investments in this State of the character herein prescribed,
7		including foreign and non-domestic alien insurance companies
8		as defined in Section 2 of the "Illinois Insurance Code." No
9		sale or lease shall be made hereunder to any of the aforesaid
10		corporations, associations or individuals unless a plan
11		approved by the Authority has been presented by the purchaser
12		or lessee for the development or redevelopment of such
13		property, together with a bond, with satisfactory sureties, of
14		not less than 10% of the cost of such development or
15		redevelopment, conditioned upon the completion of such
16		development or redevelopment; provided that the requirement of
17		the bond may be waived by the Department of Commerce and
18		Economic Opportunity if it is satisfied of the financial
19		ability of the purchaser or lessee to complete such
20		development or redevelopment in accordance with the presented
21		plan. To further assure that the real property so sold or
22		leased shall be used in accordance with the plan, the
23		Department of Commerce and Economic Opportunity may require
24		the purchaser or lessee to execute in writing such
25		undertakings as the Department deems necessary to obligate
26		such purchaser or lessee (1) to use the property for the

SB3865 Engrossed - 558 - LRB102 24242 RJF 33473 b
1		purposes presented in the plan; (2) to commence and complete
2		the building of the improvements designated in the plan within
3		the periods of time that the Department of Commerce and
4		Economic Opportunity fixes as reasonable, and (3) to comply
5		with such other conditions as are necessary to carry out the
6		purposes of this Act. Any such property may be sold pursuant to
7		this section for any legal consideration in an amount to be
8		approved by the Department of Commerce and Economic
9		Opportunity. Subject to the approval of the Department of
10		Commerce and Economic Opportunity, a housing authority may pay
11		to any non-profit corporation of the character described in
12		this section from grants made available from state funds, such
13		sum of money which, when added to the value of the land so sold
14		or leased to such non-profit corporation and the value of
15		other assets of such non-profit corporation available for use
16		in the project, will enable such non-profit corporation to
17		obtain Federal Housing Administration insured construction
18		mortgages. Any such authority may also sell, transfer, convey
19		or assign to any such non-profit corporation any personal
20		property, including building materials and supplies, as it
21		deems necessary to facilitate the completion of the
22		development or redevelopment by such non-profit corporation.
23		If the area of operation of a housing authority includes a
24		city, village or incorporated town having a population in
25		excess of 500,000, as determined by the last preceding Federal
26		Census, no real property or interest in real property shall be

SB3865 Engrossed - 559 - LRB102 24242 RJF 33473 b
1		acquired in such municipality by the housing authority until
2		such time as the housing authority has advised the governing
3		body of such municipality of the description of the real
4		property, or interest therein, proposed to be acquired, and
5		the governing body of the municipality has approved the
6		acquisition thereof by the housing authority.
7		(Source: P.A. 94-793, eff. 5-19-06; 94-1055, eff. 1-1-07.)
8		Section 140. The Urban Renewal Consolidation Act of 1961
9		is amended by changing Section 18 as follows:
10		(315 ILCS 30/18) (from Ch. 67 1/2, par. 91.118)
11		Sec. 18. The Department may at such times as it deems
12		expedient transfer and sell the fee simple title, or such
13		lesser estate as the Department may have acquired, or as may
14		theretofore have been acquired by a land clearance commission,
15		to all or any part of the real property within the area of a
16		redevelopment project not disposed of in accordance with
17		Sections 15, 16, and 17 hereof to (1) Neighborhood
18		Redevelopment Corporations operating under the "Neighborhood
19		Redevelopment Corporation Law," approved July 9, 1941, as
20		amended, (2) Insurance Companies operating under Section 125a
21		of the "Illinois Insurance Code," approved June 29, 1937, as
22		amended, (3) any individual, association, or corporation,
23		organized under the laws of this State or of any other State or
24		country, which may legally make such investments in this

SB3865 Engrossed - 560 - LRB102 24242 RJF 33473 b
1		State, including foreign and non-domestic alien insurance
2		companies, as defined in Section 2 of said "Illinois Insurance
3		Code", or (4) bodies politic and corporate, public
4		corporations, or any private interest empowered by law to
5		acquire, develop and use such real property for such uses,
6		public or private, as are in accordance with an approved plan;
7		provided, however, that any sale of real property to a housing
8		authority shall be made only in accordance with the provisions
9		of Sections 16 and 17 hereof. To assure that the real property
10		so sold is used in accordance with the approved plan referred
11		to in Section 19 hereof, the Department shall inquire into and
12		satisfy itself concerning the financial ability of the
13		purchaser to complete the redevelopment in accordance with the
14		approved plan and shall require the purchaser to execute in
15		writing such undertakings as the Department may deem necessary
16		to obligate the purchaser: (1) to use the land for the purposes
17		designated in the approved plan, (2) to commence and complete
18		the building of the improvements within the periods of time
19		which the Department fixes as reasonable, and (3) to comply
20		with such other conditions as are necessary to carry out the
21		purposes of this Act. Any such area may be sold either as an
22		entirety or in such parcels as the Department shall deem
23		expedient. It shall not be necessary that title be acquired to
24		all real property within the area of a redevelopment project
25		before the sale of a part thereof may be made as provided
26		herein. Any real property sold pursuant to the foregoing

SB3865 Engrossed - 561 - LRB102 24242 RJF 33473 b
1		provisions of this Section shall be sold at its use value
2		(which may be less than its acquisition cost), which
3		represents the value at which the Department determines such
4		land should be made available in order that it may be developed
5		or redeveloped for the purposes specified in the approved
6		plan.
7		Any real property lying within the area of the
8		redevelopment project which has not been sold by the
9		Department within five years after the Department has acquired
10		title to all the real property within the area of that
11		redevelopment project, shall be forthwith sold by the
12		Department at public sale for cash to the highest bidder
13		obligating himself in the manner set forth in the preceding
14		paragraph of this Section to redevelop the property in
15		accordance with the approved plan. Notice of such sale and of
16		the place where the approved plan may be inspected shall be
17		published once in a newspaper having a general circulation in
18		the municipality in which the real property is situated at
19		least twenty (20) days prior to the date of such public sale,
20		and shall contain a description of the real property to be
21		sold.
22		The Department may reject the bids received if, in the
23		opinion of the Department, the highest bid does not equal or
24		exceed the use value (as hereinabove defined) of the land to be
25		sold. At the expiration of six (6) months from the date of
26		rejecting bids, the Department shall again advertise for sale

SB3865 Engrossed - 562 - LRB102 24242 RJF 33473 b
1		any real property then remaining unsold. Each publication
2		shall be subject to the same requirements and conditions as
3		the original publication.
4		(Source: P.A. 83-333.)
5		Section 145. The Service Member Employment and
6		Reemployment Rights Act is amended by changing Section 1-10 as
7		follows:
8		(330 ILCS 61/1-10)
9		Sec. 1-10. Definitions. As used in this Act:
10		"Accrue" means to accumulate in regular or increasing
11		amounts over time subject to customary allocation of cost.
12		"Active duty" means any full-time military service
13		regardless of length or voluntariness including, but not
14		limited to, annual training, full-time National Guard duty,
15		and State active duty. "Active duty" does not include any form
16		of inactive duty service such as drill duty or muster duty.
17		"Active duty", unless provided otherwise, includes active duty
18		without pay.
19		"Active service" means all forms of active and inactive
20		duty regardless of voluntariness including, but not limited
21		to, annual training, active duty for training, initial active
22		duty training, overseas training duty, full-time National
23		Guard duty, active duty other than training, State active
24		duty, mobilizations, and muster duty. "Active service", unless

SB3865 Engrossed - 563 - LRB102 24242 RJF 33473 b
1		provided otherwise, includes active service without pay.
2		"Active service" includes:
3		(1) Reserve component voluntary active service means
4		service under one of the following authorities:
5		(A) any duty under 32 U.S.C. 502(f)(1)(B);
6		(B) active guard reserve duty, operational
7		support, or additional duty under 10 U.S.C. 12301(d)
8		or 32 U.S.C. 502(f)(1)(B);
9		(C) funeral honors under 10 U.S.C. 12503 or 32
10		U.S.C. 115;
11		(D) duty at the National Guard Bureau under 10
12		U.S.C. 12402;
13		(E) unsatisfactory participation under 10 U.S.C.
14		10148 or 10 U.S.C. 12303;
15		(F) discipline under 10 U.S.C. 802(d);
16		(G) extended active duty under 10 U.S.C. 12311;
17		and
18		(H) reserve program administrator under 10 U.S.C.
19		10211.
20		(2) Reserve component involuntary active service
21		includes, but is not limited to, service under one of the
22		following authorities:
23		(A) annual training or drill requirements under 10
24		U.S.C. 10147, 10 U.S.C. 12301(b) or 32 U.S.C. 502(a).
25		(B) additional training duty or other duty under
26		32 U.S.C. 502(f)(1)(A);

SB3865 Engrossed - 564 - LRB102 24242 RJF 33473 b
1		(C) pre-planned or pre-programmed combatant
2		commander support under 10 U.S.C. 12304b;
3		(D) mobilization under 10 U.S.C. 12301(a) or 10
4		U.S.C. 12302;
5		(E) presidential reserve call-up under 10 U.S.C.
6		12304;
7		(F) emergencies and natural disasters under 10
8		U.S.C. 12304a or 14 U.S.C. 712;
9		(G) muster duty under 10 U.S.C. 12319;
10		(H) retiree recall under 10 U.S.C. 688;
11		(I) captive status under 10 U.S.C. 12301(g);
12		(J) insurrection under 10 U.S.C. 331, 10 U.S.C.
13		332, or 10 U.S.C. 12406;
14		(K) pending line of duty determination for
15		response to sexual assault under 10 U.S.C. 12323; and
16		(L) initial active duty for training under 10
17		U.S.C. 671.
18		Reserve component active service not listed in paragraph
19		(1) or (2) shall be considered involuntary active service
20		under paragraph (2).
21		"Active service without pay" means active service
22		performed under any authority in which base pay is not
23		received regardless of other allowances.
24		"Annual training" means any active duty performed under
25		Section 10147 or 12301(b) of Title 10 of the United States Code
26		or under Section 502(a) of Title 32 of the United States Code.

SB3865 Engrossed - 565 - LRB102 24242 RJF 33473 b
1		"Base pay" means the main component of military pay,
2		whether active or inactive, based on rank and time in service.
3		It does not include the addition of conditional funds for
4		specific purposes such as allowances, incentive and special
5		pay. Base pay, also known as basic pay, can be determined by
6		referencing the appropriate military pay chart covering the
7		time period in question located on the federal Defense Finance
8		and Accounting Services website or as reflected on a federal
9		Military Leave and Earnings Statement.
10		"Benefits" includes, but is not limited to, the terms,
11		conditions, or privileges of employment, including any
12		advantage, profit, privilege, gain, status, account, or
13		interest, including wages or salary for work performed, that
14		accrues by reason of an employment contract or agreement or an
15		employer policy, plan, or practice and includes rights and
16		benefits under a pension plan, a health plan, an employee
17		stock ownership plan, insurance coverage and awards, bonuses,
18		severance pay, supplemental unemployment benefits, vacations,
19		and the opportunity to select work hours or location of
20		employment.
21		"Differential compensation" means pay due when the
22		employee's daily rate of compensation for military service is
23		less than his or her daily rate of compensation as a public
24		employee.
25		"Employee" means anyone employed by an employer.
26		"Employee" includes any person who is a citizen, national, or

SB3865 Engrossed - 566 - LRB102 24242 RJF 33473 b
1		permanent resident noncitizen alien of the United States
2		employed in a workplace that the State has legal authority to
3		regulate business and employment. "Employee" does not include
4		an independent contractor.
5		"Employer" means any person, institution, organization, or
6		other entity that pays salary or wages for work performed or
7		that has control over employment opportunities, including:
8		(1) a person, institution, organization, or other
9		entity to whom the employer has delegated the performance
10		of employment-related responsibilities;
11		(2) an employer of a public employee;
12		(3) any successor in interest to a person,
13		institution, organization, or other entity referred to
14		under this definition; and
15		(4) a person, institution, organization, or other
16		entity that has been denied initial employment in
17		violation of Section 5-15.
18		"Inactive duty" means inactive duty training, including
19		drills, consisting of regularly scheduled unit training
20		assemblies, additional training assemblies, periods of
21		appropriate duty or equivalent training, and any special
22		additional duties authorized for reserve component personnel
23		by appropriate military authority. "Inactive duty" does not
24		include active duty.
25		"Military leave" means a furlough or leave of absence
26		while performing active service. It cannot be substituted for

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1		accrued vacation, annual, or similar leave with pay except at
2		the sole discretion of the service member employee. It is not a
3		benefit of employment that is requested but a legal
4		requirement upon receiving notice of pending military service.
5		"Military service" means:
6		(1) Service in the Armed Forces of the United States,
7		the National Guard of any state or territory regardless of
8		status, and the State Guard as defined in the State Guard
9		Act. "Military service", whether active or reserve,
10		includes service under the authority of U.S.C. Titles 10,
11		14, or 32, or State active duty.
12		(2) Service in a federally recognized auxiliary of the
13		United States Armed Forces when performing official duties
14		in support of military or civilian authorities as a result
15		of an emergency.
16		(3) A period for which an employee is absent from a
17		position of employment for the purpose of medical or
18		dental treatment for a condition, illness, or injury
19		sustained or aggravated during a period of active service
20		in which treatment is paid by the United States Department
21		of Defense Military Health System.
22		"Public employee" means any person classified as a
23		full-time employee of the State of Illinois, a unit of local
24		government, a public institution of higher education as
25		defined in Section 1 of the Board of Higher Education Act, or a
26		school district, other than an independent contractor.

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1		"Reserve component" means the reserve components of
2		Illinois and the United States Armed Forces regardless of
3		status.
4		"Service member" means any person who is a member of a
5		military service.
6		"State active duty" means full-time State-funded military
7		duty under the command and control of the Governor and subject
8		to the Military Code of Illinois.
9		"Unit of local government" means any city, village, town,
10		county, or special district.
11		(Source: P.A. 100-1101, eff. 1-1-19.)
12		Section 150. The Firearm Owners Identification Card Act is
13		amended by changing Sections 1.1, 4, and 8 as follows:
14		(430 ILCS 65/1.1) (from Ch. 38, par. 83-1.1)
15		Sec. 1.1. For purposes of this Act:
16		"Addicted to narcotics" means a person who has been:
17		(1) convicted of an offense involving the use or
18		possession of cannabis, a controlled substance, or
19		methamphetamine within the past year; or
20		(2) determined by the Illinois State Police to be
21		addicted to narcotics based upon federal law or federal
22		guidelines.
23		"Addicted to narcotics" does not include possession or use
24		of a prescribed controlled substance under the direction and

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1		authority of a physician or other person authorized to
2		prescribe the controlled substance when the controlled
3		substance is used in the prescribed manner.
4		"Adjudicated as a person with a mental disability" means
5		the person is the subject of a determination by a court, board,
6		commission or other lawful authority that the person, as a
7		result of marked subnormal intelligence, or mental illness,
8		mental impairment, incompetency, condition, or disease:
9		(1) presents a clear and present danger to himself,
10		herself, or to others;
11		(2) lacks the mental capacity to manage his or her own
12		affairs or is adjudicated a person with a disability as
13		defined in Section 11a-2 of the Probate Act of 1975;
14		(3) is not guilty in a criminal case by reason of
15		insanity, mental disease or defect;
16		(3.5) is guilty but mentally ill, as provided in
17		Section 5-2-6 of the Unified Code of Corrections;
18		(4) is incompetent to stand trial in a criminal case;
19		(5) is not guilty by reason of lack of mental
20		responsibility under Articles 50a and 72b of the Uniform
21		Code of Military Justice, 10 U.S.C. 850a, 876b;
22		(6) is a sexually violent person under subsection (f)
23		of Section 5 of the Sexually Violent Persons Commitment
24		Act;
25		(7) is a sexually dangerous person under the Sexually
26		Dangerous Persons Act;

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1		(8) is unfit to stand trial under the Juvenile Court
2		Act of 1987;
3		(9) is not guilty by reason of insanity under the
4		Juvenile Court Act of 1987;
5		(10) is subject to involuntary admission as an
6		inpatient as defined in Section 1-119 of the Mental Health
7		and Developmental Disabilities Code;
8		(11) is subject to involuntary admission as an
9		outpatient as defined in Section 1-119.1 of the Mental
10		Health and Developmental Disabilities Code;
11		(12) is subject to judicial admission as set forth in
12		Section 4-500 of the Mental Health and Developmental
13		Disabilities Code; or
14		(13) is subject to the provisions of the Interstate
15		Agreements on Sexually Dangerous Persons Act.
16		"Clear and present danger" means a person who:
17		(1) communicates a serious threat of physical violence
18		against a reasonably identifiable victim or poses a clear
19		and imminent risk of serious physical injury to himself,
20		herself, or another person as determined by a physician,
21		clinical psychologist, or qualified examiner; or
22		(2) demonstrates threatening physical or verbal
23		behavior, such as violent, suicidal, or assaultive
24		threats, actions, or other behavior, as determined by a
25		physician, clinical psychologist, qualified examiner,
26		school administrator, or law enforcement official.

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1		"Clinical psychologist" has the meaning provided in
2		Section 1-103 of the Mental Health and Developmental
3		Disabilities Code.
4		"Controlled substance" means a controlled substance or
5		controlled substance analog as defined in the Illinois
6		Controlled Substances Act.
7		"Counterfeit" means to copy or imitate, without legal
8		authority, with intent to deceive.
9		"Federally licensed firearm dealer" means a person who is
10		licensed as a federal firearms dealer under Section 923 of the
11		federal Gun Control Act of 1968 (18 U.S.C. 923).
12		"Firearm" means any device, by whatever name known, which
13		is designed to expel a projectile or projectiles by the action
14		of an explosion, expansion of gas or escape of gas; excluding,
15		however:
16		(1) any pneumatic gun, spring gun, paint ball gun, or
17		B-B gun which expels a single globular projectile not
18		exceeding .18 inch in diameter or which has a maximum
19		muzzle velocity of less than 700 feet per second;
20		(1.1) any pneumatic gun, spring gun, paint ball gun,
21		or B-B gun which expels breakable paint balls containing
22		washable marking colors;
23		(2) any device used exclusively for signaling or
24		safety and required or recommended by the United States
25		Coast Guard or the Interstate Commerce Commission;
26		(3) any device used exclusively for the firing of stud

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1		cartridges, explosive rivets or similar industrial
2		ammunition; and
3		(4) an antique firearm (other than a machine-gun)
4		which, although designed as a weapon, the Illinois State
5		Police finds by reason of the date of its manufacture,
6		value, design, and other characteristics is primarily a
7		collector's item and is not likely to be used as a weapon.
8		"Firearm ammunition" means any self-contained cartridge or
9		shotgun shell, by whatever name known, which is designed to be
10		used or adaptable to use in a firearm; excluding, however:
11		(1) any ammunition exclusively designed for use with a
12		device used exclusively for signaling signalling or safety
13		and required or recommended by the United States Coast
14		Guard or the Interstate Commerce Commission; and
15		(2) any ammunition designed exclusively for use with a
16		stud or rivet driver or other similar industrial
17		ammunition.
18		"Gun show" means an event or function:
19		(1) at which the sale and transfer of firearms is the
20		regular and normal course of business and where 50 or more
21		firearms are displayed, offered, or exhibited for sale,
22		transfer, or exchange; or
23		(2) at which not less than 10 gun show vendors
24		display, offer, or exhibit for sale, sell, transfer, or
25		exchange firearms.
26		"Gun show" includes the entire premises provided for an

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1		event or function, including parking areas for the event or
2		function, that is sponsored to facilitate the purchase, sale,
3		transfer, or exchange of firearms as described in this
4		Section. Nothing in this definition shall be construed to
5		exclude a gun show held in conjunction with competitive
6		shooting events at the World Shooting Complex sanctioned by a
7		national governing body in which the sale or transfer of
8		firearms is authorized under subparagraph (5) of paragraph (g)
9		of subsection (A) of Section 24-3 of the Criminal Code of 2012.
10		Unless otherwise expressly stated, "gun show" does not
11		include training or safety classes, competitive shooting
12		events, such as rifle, shotgun, or handgun matches, trap,
13		skeet, or sporting clays shoots, dinners, banquets, raffles,
14		or any other event where the sale or transfer of firearms is
15		not the primary course of business.
16		"Gun show promoter" means a person who organizes or
17		operates a gun show.
18		"Gun show vendor" means a person who exhibits, sells,
19		offers for sale, transfers, or exchanges any firearms at a gun
20		show, regardless of whether the person arranges with a gun
21		show promoter for a fixed location from which to exhibit,
22		sell, offer for sale, transfer, or exchange any firearm.
23		"Involuntarily admitted" has the meaning as prescribed in
24		Sections 1-119 and 1-119.1 of the Mental Health and
25		Developmental Disabilities Code.
26		"Mental health facility" means any licensed private

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1		hospital or hospital affiliate, institution, or facility, or
2		part thereof, and any facility, or part thereof, operated by
3		the State or a political subdivision thereof which provides
4		provide treatment of persons with mental illness and includes
5		all hospitals, institutions, clinics, evaluation facilities,
6		mental health centers, colleges, universities, long-term care
7		facilities, and nursing homes, or parts thereof, which provide
8		treatment of persons with mental illness whether or not the
9		primary purpose is to provide treatment of persons with mental
10		illness.
11		"National governing body" means a group of persons who
12		adopt rules and formulate policy on behalf of a national
13		firearm sporting organization.
14		"Noncitizen" means a person who is not a citizen of the
15		United States, but is a person who is a foreign-born person who
16		lives in the United States, has not been naturalized, and is
17		still a citizen of a foreign country.
18		"Patient" means:
19		(1) a person who is admitted as an inpatient or
20		resident of a public or private mental health facility for
21		mental health treatment under Chapter III of the Mental
22		Health and Developmental Disabilities Code as an informal
23		admission, a voluntary admission, a minor admission, an
24		emergency admission, or an involuntary admission, unless
25		the treatment was solely for an alcohol abuse disorder; or
26		(2) a person who voluntarily or involuntarily receives

SB3865 Engrossed - 575 - LRB102 24242 RJF 33473 b
1		mental health treatment as an out-patient or is otherwise
2		provided services by a public or private mental health
3		facility, and who poses a clear and present danger to
4		himself, herself, or to others.
5		"Person with a developmental disability" means a person
6		with a disability which is attributable to any other condition
7		which results in impairment similar to that caused by an
8		intellectual disability and which requires services similar to
9		those required by persons with intellectual disabilities. The
10		disability must originate before the age of 18 years, be
11		expected to continue indefinitely, and constitute a
12		substantial disability. This disability results, in the
13		professional opinion of a physician, clinical psychologist, or
14		qualified examiner, in significant functional limitations in 3
15		or more of the following areas of major life activity:
16		(i) self-care;
17		(ii) receptive and expressive language;
18		(iii) learning;
19		(iv) mobility; or
20		(v) self-direction.
21		"Person with an intellectual disability" means a person
22		with a significantly subaverage general intellectual
23		functioning which exists concurrently with impairment in
24		adaptive behavior and which originates before the age of 18
25		years.
26		"Physician" has the meaning as defined in Section 1-120 of

SB3865 Engrossed - 576 - LRB102 24242 RJF 33473 b
1		the Mental Health and Developmental Disabilities Code.
2		"Protective order" means any orders of protection issued
3		under the Illinois Domestic Violence Act of 1986, stalking no
4		contact orders issued under the Stalking No Contact Order Act,
5		civil no contact orders issued under the Civil No Contact
6		Order Act, and firearms restraining orders issued under the
7		Firearms Restraining Order Act.
8		"Qualified examiner" has the meaning provided in Section
9		1-122 of the Mental Health and Developmental Disabilities
10		Code.
11		"Sanctioned competitive shooting event" means a shooting
12		contest officially recognized by a national or state shooting
13		sport association, and includes any sight-in or practice
14		conducted in conjunction with the event.
15		"School administrator" means the person required to report
16		under the School Administrator Reporting of Mental Health
17		Clear and Present Danger Determinations Law.
18		"Stun gun or taser" has the meaning ascribed to it in
19		Section 24-1 of the Criminal Code of 2012.
20		(Source: P.A. 102-237, eff. 1-1-22; 102-538, eff. 8-20-21;
21		revised 10-6-21.)
22		(430 ILCS 65/4) (from Ch. 38, par. 83-4)
23		Sec. 4. Application for Firearm Owner's Identification
24		Cards.
25		(a) Each applicant for a Firearm Owner's Identification

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1		Card must:
2		(1) Submit an application as made available by the
3		Illinois State Police; and
4		(2) Submit evidence to the Illinois State Police that:
5		(i) This subparagraph (i) applies through the
6		180th day following July 12, 2019 (the effective date
7		of Public Act 101-80) this amendatory Act of the 101st
8		General Assembly. He or she is 21 years of age or over,
9		or if he or she is under 21 years of age that he or she
10		has the written consent of his or her parent or legal
11		guardian to possess and acquire firearms and firearm
12		ammunition and that he or she has never been convicted
13		of a misdemeanor other than a traffic offense or
14		adjudged delinquent, provided, however, that such
15		parent or legal guardian is not an individual
16		prohibited from having a Firearm Owner's
17		Identification Card and files an affidavit with the
18		Department as prescribed by the Department stating
19		that he or she is not an individual prohibited from
20		having a Card;
21		(i-5) This subparagraph (i-5) applies on and after
22		the 181st day following July 12, 2019 (the effective
23		date of Public Act 101-80) this amendatory Act of the
24		101st General Assembly. He or she is 21 years of age or
25		over, or if he or she is under 21 years of age that he
26		or she has never been convicted of a misdemeanor other

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1		than a traffic offense or adjudged delinquent and is
2		an active duty member of the United States Armed
3		Forces or has the written consent of his or her parent
4		or legal guardian to possess and acquire firearms and
5		firearm ammunition, provided, however, that such
6		parent or legal guardian is not an individual
7		prohibited from having a Firearm Owner's
8		Identification Card and files an affidavit with the
9		Illinois State Police Department as prescribed by the
10		Illinois State Police Department stating that he or
11		she is not an individual prohibited from having a Card
12		or the active duty member of the United States Armed
13		Forces under 21 years of age annually submits proof to
14		the Illinois State Police, in a manner prescribed by
15		the Illinois State Police Department;
16		(ii) He or she has not been convicted of a felony
17		under the laws of this or any other jurisdiction;
18		(iii) He or she is not addicted to narcotics;
19		(iv) He or she has not been a patient in a mental
20		health facility within the past 5 years or, if he or
21		she has been a patient in a mental health facility more
22		than 5 years ago submit the certification required
23		under subsection (u) of Section 8 of this Act;
24		(v) He or she is not a person with an intellectual
25		disability;
26		(vi) He or she is not a noncitizen an alien who is

SB3865 Engrossed - 579 - LRB102 24242 RJF 33473 b
1		unlawfully present in the United States under the laws
2		of the United States;
3		(vii) He or she is not subject to an existing order
4		of protection prohibiting him or her from possessing a
5		firearm;
6		(viii) He or she has not been convicted within the
7		past 5 years of battery, assault, aggravated assault,
8		violation of an order of protection, or a
9		substantially similar offense in another jurisdiction,
10		in which a firearm was used or possessed;
11		(ix) He or she has not been convicted of domestic
12		battery, aggravated domestic battery, or a
13		substantially similar offense in another jurisdiction
14		committed before, on or after January 1, 2012 (the
15		effective date of Public Act 97-158). If the applicant
16		knowingly and intelligently waives the right to have
17		an offense described in this clause (ix) tried by a
18		jury, and by guilty plea or otherwise, results in a
19		conviction for an offense in which a domestic
20		relationship is not a required element of the offense
21		but in which a determination of the applicability of
22		18 U.S.C. 922(g)(9) is made under Section 112A-11.1 of
23		the Code of Criminal Procedure of 1963, an entry by the
24		court of a judgment of conviction for that offense
25		shall be grounds for denying the issuance of a Firearm
26		Owner's Identification Card under this Section;

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1		(x) (Blank);
2		(xi) He or she is not a person an alien who has
3		been admitted to the United States under a
4		non-immigrant visa (as that term is defined in Section
5		101(a)(26) of the Immigration and Nationality Act (8
6		U.S.C. 1101(a)(26))), or that he or she is a
7		noncitizen an alien who has been lawfully admitted to
8		the United States under a non-immigrant visa if that
9		person alien is:
10		(1) admitted to the United States for lawful
11		hunting or sporting purposes;
12		(2) an official representative of a foreign
13		government who is:
14		(A) accredited to the United States
15		Government or the Government's mission to an
16		international organization having its
17		headquarters in the United States; or
18		(B) en route to or from another country to
19		which that noncitizen alien is accredited;
20		(3) an official of a foreign government or
21		distinguished foreign visitor who has been so
22		designated by the Department of State;
23		(4) a foreign law enforcement officer of a
24		friendly foreign government entering the United
25		States on official business; or
26		(5) one who has received a waiver from the

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1		Attorney General of the United States pursuant to
2		18 U.S.C. 922(y)(3);
3		(xii) He or she is not a minor subject to a
4		petition filed under Section 5-520 of the Juvenile
5		Court Act of 1987 alleging that the minor is a
6		delinquent minor for the commission of an offense that
7		if committed by an adult would be a felony;
8		(xiii) He or she is not an adult who had been
9		adjudicated a delinquent minor under the Juvenile
10		Court Act of 1987 for the commission of an offense that
11		if committed by an adult would be a felony;
12		(xiv) He or she is a resident of the State of
13		Illinois;
14		(xv) He or she has not been adjudicated as a person
15		with a mental disability;
16		(xvi) He or she has not been involuntarily
17		admitted into a mental health facility; and
18		(xvii) He or she is not a person with a
19		developmental disability; and
20		(3) Upon request by the Illinois State Police, sign a
21		release on a form prescribed by the Illinois State Police
22		waiving any right to confidentiality and requesting the
23		disclosure to the Illinois State Police of limited mental
24		health institution admission information from another
25		state, the District of Columbia, any other territory of
26		the United States, or a foreign nation concerning the

SB3865 Engrossed - 582 - LRB102 24242 RJF 33473 b
1		applicant for the sole purpose of determining whether the
2		applicant is or was a patient in a mental health
3		institution and disqualified because of that status from
4		receiving a Firearm Owner's Identification Card. No mental
5		health care or treatment records may be requested. The
6		information received shall be destroyed within one year of
7		receipt.
8		(a-5) Each applicant for a Firearm Owner's Identification
9		Card who is over the age of 18 shall furnish to the Illinois
10		State Police either his or her Illinois driver's license
11		number or Illinois Identification Card number, except as
12		provided in subsection (a-10).
13		(a-10) Each applicant for a Firearm Owner's Identification
14		Card, who is employed as a law enforcement officer, an armed
15		security officer in Illinois, or by the United States Military
16		permanently assigned in Illinois and who is not an Illinois
17		resident, shall furnish to the Illinois State Police his or
18		her driver's license number or state identification card
19		number from his or her state of residence. The Illinois State
20		Police may adopt rules to enforce the provisions of this
21		subsection (a-10).
22		(a-15) If an applicant applying for a Firearm Owner's
23		Identification Card moves from the residence address named in
24		the application, he or she shall immediately notify in a form
25		and manner prescribed by the Illinois State Police of that
26		change of address.

SB3865 Engrossed - 583 - LRB102 24242 RJF 33473 b
1		(a-20) Each applicant for a Firearm Owner's Identification
2		Card shall furnish to the Illinois State Police his or her
3		photograph. An applicant who is 21 years of age or older
4		seeking a religious exemption to the photograph requirement
5		must furnish with the application an approved copy of United
6		States Department of the Treasury Internal Revenue Service
7		Form 4029. In lieu of a photograph, an applicant regardless of
8		age seeking a religious exemption to the photograph
9		requirement shall submit fingerprints on a form and manner
10		prescribed by the Illinois State Police Department with his or
11		her application.
12		(a-25) Beginning January 1, 2023, each applicant for the
13		issuance of a Firearm Owner's Identification Card may include
14		a full set of his or her fingerprints in electronic format to
15		the Illinois State Police, unless the applicant has previously
16		provided a full set of his or her fingerprints to the Illinois
17		State Police under this Act or the Firearm Concealed Carry
18		Act.
19		The fingerprints must be transmitted through a live scan
20		fingerprint vendor licensed by the Department of Financial and
21		Professional Regulation. The fingerprints shall be checked
22		against the fingerprint records now and hereafter filed in the
23		Illinois State Police and Federal Bureau of Investigation
24		criminal history records databases, including all available
25		State and local criminal history record information files.
26		The Illinois State Police shall charge applicants a

SB3865 Engrossed - 584 - LRB102 24242 RJF 33473 b
1		one-time fee for conducting the criminal history record check,
2		which shall be deposited into the State Police Services Fund
3		and shall not exceed the actual cost of the State and national
4		criminal history record check.
5		(a-26) The Illinois State Police shall research, explore,
6		and report to the General Assembly by January 1, 2022 on the
7		feasibility of permitting voluntarily submitted fingerprints
8		obtained for purposes other than Firearm Owner's
9		Identification Card enforcement that are contained in the
10		Illinois State Police database for purposes of this Act.
11		(b) Each application form shall include the following
12		statement printed in bold type: "Warning: Entering false
13		information on an application for a Firearm Owner's
14		Identification Card is punishable as a Class 2 felony in
15		accordance with subsection (d-5) of Section 14 of the Firearm
16		Owners Identification Card Act.".
17		(c) Upon such written consent, pursuant to Section 4,
18		paragraph (a)(2)(i), the parent or legal guardian giving the
19		consent shall be liable for any damages resulting from the
20		applicant's use of firearms or firearm ammunition.
21		(Source: P.A. 101-80, eff. 7-12-19; 102-237, eff. 1-1-22;
22		102-538, eff. 8-20-21; revised 10-12-21.)
23		(430 ILCS 65/8) (from Ch. 38, par. 83-8)
24		Sec. 8. Grounds for denial and revocation. The Illinois
25		State Police has authority to deny an application for or to

SB3865 Engrossed - 585 - LRB102 24242 RJF 33473 b
1		revoke and seize a Firearm Owner's Identification Card
2		previously issued under this Act only if the Illinois State
3		Police Department finds that the applicant or the person to
4		whom such card was issued is or was at the time of issuance:
5		(a) A person under 21 years of age who has been
6		convicted of a misdemeanor other than a traffic offense or
7		adjudged delinquent;
8		(b) This subsection (b) applies through the 180th day
9		following July 12, 2019 (the effective date of Public Act
10		101-80) this amendatory Act of the 101st General Assembly.
11		A person under 21 years of age who does not have the
12		written consent of his parent or guardian to acquire and
13		possess firearms and firearm ammunition, or whose parent
14		or guardian has revoked such written consent, or where
15		such parent or guardian does not qualify to have a Firearm
16		Owner's Identification Card;
17		(b-5) This subsection (b-5) applies on and after the
18		181st day following July 12, 2019 (the effective date of
19		Public Act 101-80) this amendatory Act of the 101st
20		General Assembly. A person under 21 years of age who is not
21		an active duty member of the United States Armed Forces
22		and does not have the written consent of his or her parent
23		or guardian to acquire and possess firearms and firearm
24		ammunition, or whose parent or guardian has revoked such
25		written consent, or where such parent or guardian does not
26		qualify to have a Firearm Owner's Identification Card;

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1		(c) A person convicted of a felony under the laws of
2		this or any other jurisdiction;
3		(d) A person addicted to narcotics;
4		(e) A person who has been a patient of a mental health
5		facility within the past 5 years or a person who has been a
6		patient in a mental health facility more than 5 years ago
7		who has not received the certification required under
8		subsection (u) of this Section. An active law enforcement
9		officer employed by a unit of government or a Department
10		of Corrections employee authorized to possess firearms who
11		is denied, revoked, or has his or her Firearm Owner's
12		Identification Card seized under this subsection (e) may
13		obtain relief as described in subsection (c-5) of Section
14		10 of this Act if the officer or employee did not act in a
15		manner threatening to the officer or employee, another
16		person, or the public as determined by the treating
17		clinical psychologist or physician, and the officer or
18		employee seeks mental health treatment;
19		(f) A person whose mental condition is of such a
20		nature that it poses a clear and present danger to the
21		applicant, any other person or persons, or the community;
22		(g) A person who has an intellectual disability;
23		(h) A person who intentionally makes a false statement
24		in the Firearm Owner's Identification Card application;
25		(i) A noncitizen An alien who is unlawfully present in
26		the United States under the laws of the United States;

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1		(i-5) A person An alien who has been admitted to the
2		United States under a non-immigrant visa (as that term is
3		defined in Section 101(a)(26) of the Immigration and
4		Nationality Act (8 U.S.C. 1101(a)(26))), except that this
5		subsection (i-5) does not apply to any noncitizen alien
6		who has been lawfully admitted to the United States under
7		a non-immigrant visa if that person alien is:
8		(1) admitted to the United States for lawful
9		hunting or sporting purposes;
10		(2) an official representative of a foreign
11		government who is:
12		(A) accredited to the United States Government
13		or the Government's mission to an international
14		organization having its headquarters in the United
15		States; or
16		(B) en route to or from another country to
17		which that noncitizen alien is accredited;
18		(3) an official of a foreign government or
19		distinguished foreign visitor who has been so
20		designated by the Department of State;
21		(4) a foreign law enforcement officer of a
22		friendly foreign government entering the United States
23		on official business; or
24		(5) one who has received a waiver from the
25		Attorney General of the United States pursuant to 18
26		U.S.C. 922(y)(3);

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1		(j) (Blank);
2		(k) A person who has been convicted within the past 5
3		years of battery, assault, aggravated assault, violation
4		of an order of protection, or a substantially similar
5		offense in another jurisdiction, in which a firearm was
6		used or possessed;
7		(l) A person who has been convicted of domestic
8		battery, aggravated domestic battery, or a substantially
9		similar offense in another jurisdiction committed before,
10		on or after January 1, 2012 (the effective date of Public
11		Act 97-158). If the applicant or person who has been
12		previously issued a Firearm Owner's Identification Card
13		under this Act knowingly and intelligently waives the
14		right to have an offense described in this paragraph (l)
15		tried by a jury, and by guilty plea or otherwise, results
16		in a conviction for an offense in which a domestic
17		relationship is not a required element of the offense but
18		in which a determination of the applicability of 18 U.S.C.
19		922(g)(9) is made under Section 112A-11.1 of the Code of
20		Criminal Procedure of 1963, an entry by the court of a
21		judgment of conviction for that offense shall be grounds
22		for denying an application for and for revoking and
23		seizing a Firearm Owner's Identification Card previously
24		issued to the person under this Act;
25		(m) (Blank);
26		(n) A person who is prohibited from acquiring or

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1		possessing firearms or firearm ammunition by any Illinois
2		State statute or by federal law;
3		(o) A minor subject to a petition filed under Section
4		5-520 of the Juvenile Court Act of 1987 alleging that the
5		minor is a delinquent minor for the commission of an
6		offense that if committed by an adult would be a felony;
7		(p) An adult who had been adjudicated a delinquent
8		minor under the Juvenile Court Act of 1987 for the
9		commission of an offense that if committed by an adult
10		would be a felony;
11		(q) A person who is not a resident of the State of
12		Illinois, except as provided in subsection (a-10) of
13		Section 4;
14		(r) A person who has been adjudicated as a person with
15		a mental disability;
16		(s) A person who has been found to have a
17		developmental disability;
18		(t) A person involuntarily admitted into a mental
19		health facility; or
20		(u) A person who has had his or her Firearm Owner's
21		Identification Card revoked or denied under subsection (e)
22		of this Section or item (iv) of paragraph (2) of
23		subsection (a) of Section 4 of this Act because he or she
24		was a patient in a mental health facility as provided in
25		subsection (e) of this Section, shall not be permitted to
26		obtain a Firearm Owner's Identification Card, after the

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1		5-year period has lapsed, unless he or she has received a
2		mental health evaluation by a physician, clinical
3		psychologist, or qualified examiner as those terms are
4		defined in the Mental Health and Developmental
5		Disabilities Code, and has received a certification that
6		he or she is not a clear and present danger to himself,
7		herself, or others. The physician, clinical psychologist,
8		or qualified examiner making the certification and his or
9		her employer shall not be held criminally, civilly, or
10		professionally liable for making or not making the
11		certification required under this subsection, except for
12		willful or wanton misconduct. This subsection does not
13		apply to a person whose firearm possession rights have
14		been restored through administrative or judicial action
15		under Section 10 or 11 of this Act.
16		Upon revocation of a person's Firearm Owner's
17		Identification Card, the Illinois State Police shall provide
18		notice to the person and the person shall comply with Section
19		9.5 of this Act.
20		(Source: P.A. 101-80, eff. 7-12-19; 102-538, eff. 8-20-21;
21		102-645, eff. 1-1-22; revised 10-14-21.)
22		Section 155. The Criminal Code of 2012 is amended by
23		changing Section 17-6.5 as follows:
24		(720 ILCS 5/17-6.5)

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1		Sec. 17-6.5. Persons under deportation order;
2		ineligibility for benefits.
3		(a) An individual against whom a United States Immigration
4		Judge has issued an order of deportation which has been
5		affirmed by the Board of Immigration Review, as well as an
6		individual who appeals such an order pending appeal, under
7		paragraph 19 of Section 241(a) of the Immigration and
8		Nationality Act relating to persecution of others on account
9		of race, religion, national origin or political opinion under
10		the direction of or in association with the Nazi government of
11		Germany or its allies, shall be ineligible for the following
12		benefits authorized by State law:
13		(1) The homestead exemptions and homestead improvement
14		exemption under Sections 15-170, 15-175, 15-176, and
15		15-180 of the Property Tax Code.
16		(2) Grants under the Senior Citizens and Persons with
17		Disabilities Property Tax Relief Act.
18		(3) The double income tax exemption conferred upon
19		persons 65 years of age or older by Section 204 of the
20		Illinois Income Tax Act.
21		(4) Grants provided by the Department on Aging.
22		(5) Reductions in vehicle registration fees under
23		Section 3-806.3 of the Illinois Vehicle Code.
24		(6) Free fishing and reduced fishing license fees
25		under Sections 20-5 and 20-40 of the Fish and Aquatic Life
26		Code.

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1		(7) Tuition free courses for senior citizens under the
2		Senior Citizen Courses Act.
3		(8) Any benefits under the Illinois Public Aid Code.
4		(b) If a person has been found by a court to have knowingly
5		received benefits in violation of subsection (a) and:
6		(1) the total monetary value of the benefits received
7		is less than $150, the person is guilty of a Class A
8		misdemeanor; a second or subsequent violation is a Class 4
9		felony;
10		(2) the total monetary value of the benefits received
11		is $150 or more but less than $1,000, the person is guilty
12		of a Class 4 felony; a second or subsequent violation is a
13		Class 3 felony;
14		(3) the total monetary value of the benefits received
15		is $1,000 or more but less than $5,000, the person is
16		guilty of a Class 3 felony; a second or subsequent
17		violation is a Class 2 felony;
18		(4) the total monetary value of the benefits received
19		is $5,000 or more but less than $10,000, the person is
20		guilty of a Class 2 felony; a second or subsequent
21		violation is a Class 1 felony; or
22		(5) the total monetary value of the benefits received
23		is $10,000 or more, the person is guilty of a Class 1
24		felony.
25		(c) For purposes of determining the classification of an
26		offense under this Section, all of the monetary value of the

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1		benefits received as a result of the unlawful act, practice,
2		or course of conduct may be accumulated.
3		(d) Any grants awarded to persons described in subsection
4		(a) may be recovered by the State of Illinois in a civil action
5		commenced by the Attorney General in the circuit court of
6		Sangamon County or the State's Attorney of the county of
7		residence of the person described in subsection (a).
8		(e) An individual described in subsection (a) who has been
9		deported shall be restored to any benefits which that
10		individual has been denied under State law pursuant to
11		subsection (a) if (i) the Attorney General of the United
12		States has issued an order cancelling deportation and has
13		adjusted the status of the individual to that of a noncitizen
14		an alien lawfully admitted for permanent residence in the
15		United States or (ii) the country to which the individual has
16		been deported adjudicates or exonerates the individual in a
17		judicial or administrative proceeding as not being guilty of
18		the persecution of others on account of race, religion,
19		national origin, or political opinion under the direction of
20		or in association with the Nazi government of Germany or its
21		allies.
22		(Source: P.A. 99-143, eff. 7-27-15.)
23		Section 160. The Prevention of Cigarette and Electronic
24		Cigarette Sales to Persons under 21 Years of Age Act is amended
25		by changing Section 2 as follows:

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1		(720 ILCS 678/2)
2		Sec. 2. Definitions. For the purpose of this Act:
3		"Cigarette", when used in this Act, means any roll for
4		smoking made wholly or in part of tobacco irrespective of size
5		or shape and whether or not the tobacco is flavored,
6		adulterated, or mixed with any other ingredient, and the
7		wrapper or cover of which is made of paper or any other
8		substance or material except whole leaf tobacco.
9		"Clear and conspicuous statement" means the statement is
10		of sufficient type size to be clearly readable by the
11		recipient of the communication.
12		"Consumer" means an individual who acquires or seeks to
13		acquire cigarettes or electronic cigarettes for personal use.
14		"Delivery sale" means any sale of cigarettes or electronic
15		cigarettes to a consumer if:
16		(a) the consumer submits the order for such sale by
17		means of a telephone or other method of voice
18		transmission, the mails, or the Internet or other online
19		service, or the seller is otherwise not in the physical
20		presence of the buyer when the request for purchase or
21		order is made; or
22		(b) the cigarettes or electronic cigarettes are
23		delivered by use of a common carrier, private delivery
24		service, or the mails, or the seller is not in the physical
25		presence of the buyer when the buyer obtains possession of

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1		the cigarettes or electronic cigarettes.
2		"Delivery service" means any person (other than a person
3		that makes a delivery sale) who delivers to the consumer the
4		cigarettes or electronic cigarettes sold in a delivery sale.
5		"Department" means the Department of Revenue.
6		"Electronic cigarette" means:
7		(1) any device that employs a battery or other
8		mechanism to heat a solution or substance to produce a
9		vapor or aerosol intended for inhalation;
10		(2) any cartridge or container of a solution or
11		substance intended to be used with or in the device or to
12		refill the device; or
13		(3) any solution or substance, whether or not it
14		contains nicotine, intended for use in the device.
15		"Electronic cigarette" includes, but is not limited to,
16		any electronic nicotine delivery system, electronic cigar,
17		electronic cigarillo, electronic pipe, electronic hookah, vape
18		pen, or similar product or device, and any component, part, or
19		accessory of a device used during the operation of the device,
20		even if the part or accessory was sold separately. "Electronic
21		cigarette" does not include: cigarettes, as defined in Section
22		1 of the Cigarette Tax Act; any product approved by the United
23		States Food and Drug Administration for sale as a tobacco
24		cessation product, a tobacco dependence product, or for other
25		medical purposes that is marketed and sold solely for that
26		approved purpose; any asthma inhaler prescribed by a physician

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1		for that condition that is marketed and sold solely for that
2		approved purpose; any device that meets the definition of
3		cannabis paraphernalia under Section 1-10 of the Cannabis
4		Regulation and Tax Act; or any cannabis product sold by a
5		dispensing organization pursuant to the Cannabis Regulation
6		and Tax Act or the Compassionate Use of Medical Cannabis
7		Program Act.
8		"Government-issued identification" means a State driver's
9		license, State identification card, passport, a military
10		identification or an official naturalization or immigration
11		document, such as a an alien registration recipient card
12		(commonly known as a "green card") or an immigrant visa.
13		"Mails" or "mailing" mean the shipment of cigarettes or
14		electronic cigarettes through the United States Postal
15		Service.
16		"Out-of-state sale" means a sale of cigarettes or
17		electronic cigarettes to a consumer located outside of this
18		State where the consumer submits the order for such sale by
19		means of a telephonic or other method of voice transmission,
20		the mails or any other delivery service, facsimile
21		transmission, or the Internet or other online service and
22		where the cigarettes or electronic cigarettes are delivered by
23		use of the mails or other delivery service.
24		"Person" means any individual, corporation, partnership,
25		limited liability company, association, or other organization
26		that engages in any for-profit or not-for-profit activities.

SB3865 Engrossed - 597 - LRB102 24242 RJF 33473 b
1		"Shipping package" means a container in which packs or
2		cartons of cigarettes or electronic cigarettes are shipped in
3		connection with a delivery sale.
4		"Shipping documents" means bills of lading, air bills, or
5		any other documents used to evidence the undertaking by a
6		delivery service to deliver letters, packages, or other
7		containers.
8		(Source: P.A. 102-575, eff. 1-1-22.)
9		Section 165. The Code of Criminal Procedure of 1963 is
10		amended by changing Section 113-8 as follows:
11		(725 ILCS 5/113-8)
12		Sec. 113-8. Advisement concerning status as a noncitizen
13		an alien.
14		(a) Before the acceptance of a plea of guilty, guilty but
15		mentally ill, or nolo contendere to a misdemeanor or felony
16		offense, the court shall give the following advisement to the
17		defendant in open court:
18		"If you are not a citizen of the United States, you are
19		hereby advised that conviction of the offense for which you
20		have been charged may have the consequence of deportation,
21		exclusion from admission to the United States, or denial of
22		naturalization under the laws of the United States.".
23		(b) If the defendant is arraigned on or after the
24		effective date of this amendatory Act of the 101st General

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1		Assembly, and the court fails to advise the defendant as
2		required by subsection (a) of this Section, and the defendant
3		shows that conviction of the offense to which the defendant
4		pleaded guilty, guilty but mentally ill, or nolo contendere
5		may have the consequence for the defendant of deportation,
6		exclusion from admission to the United States, or denial of
7		naturalization under the laws of the United States, the court,
8		upon the defendant's motion, shall vacate the judgment and
9		permit the defendant to withdraw the plea of guilty, guilty
10		but mentally ill, or nolo contendere and enter a plea of not
11		guilty. The motion shall be filed within 2 years of the date of
12		the defendant's conviction.
13		(Source: P.A. 101-409, eff. 1-1-20.)
14		Section 170. The Unified Code of Corrections is amended by
15		changing Sections 3-2-2 and 5-5-3 as follows:
16		(730 ILCS 5/3-2-2) (from Ch. 38, par. 1003-2-2)
17		Sec. 3-2-2. Powers and duties of the Department.
18		(1) In addition to the powers, duties, and
19		responsibilities which are otherwise provided by law, the
20		Department shall have the following powers:
21		(a) To accept persons committed to it by the courts of
22		this State for care, custody, treatment, and
23		rehabilitation, and to accept federal prisoners and
24		noncitizens aliens over whom the Office of the Federal

SB3865 Engrossed - 599 - LRB102 24242 RJF 33473 b
1		Detention Trustee is authorized to exercise the federal
2		detention function for limited purposes and periods of
3		time.
4		(b) To develop and maintain reception and evaluation
5		units for purposes of analyzing the custody and
6		rehabilitation needs of persons committed to it and to
7		assign such persons to institutions and programs under its
8		control or transfer them to other appropriate agencies. In
9		consultation with the Department of Alcoholism and
10		Substance Abuse (now the Department of Human Services),
11		the Department of Corrections shall develop a master plan
12		for the screening and evaluation of persons committed to
13		its custody who have alcohol or drug abuse problems, and
14		for making appropriate treatment available to such
15		persons; the Department shall report to the General
16		Assembly on such plan not later than April 1, 1987. The
17		maintenance and implementation of such plan shall be
18		contingent upon the availability of funds.
19		(b-1) To create and implement, on January 1, 2002, a
20		pilot program to establish the effectiveness of
21		pupillometer technology (the measurement of the pupil's
22		reaction to light) as an alternative to a urine test for
23		purposes of screening and evaluating persons committed to
24		its custody who have alcohol or drug problems. The pilot
25		program shall require the pupillometer technology to be
26		used in at least one Department of Corrections facility.

SB3865 Engrossed - 600 - LRB102 24242 RJF 33473 b
1		The Director may expand the pilot program to include an
2		additional facility or facilities as he or she deems
3		appropriate. A minimum of 4,000 tests shall be included in
4		the pilot program. The Department must report to the
5		General Assembly on the effectiveness of the program by
6		January 1, 2003.
7		(b-5) To develop, in consultation with the Illinois
8		State Police, a program for tracking and evaluating each
9		inmate from commitment through release for recording his
10		or her gang affiliations, activities, or ranks.
11		(c) To maintain and administer all State correctional
12		institutions and facilities under its control and to
13		establish new ones as needed. Pursuant to its power to
14		establish new institutions and facilities, the Department
15		may, with the written approval of the Governor, authorize
16		the Department of Central Management Services to enter
17		into an agreement of the type described in subsection (d)
18		of Section 405-300 of the Department of Central Management
19		Services Law. The Department shall designate those
20		institutions which shall constitute the State Penitentiary
21		System. The Department of Juvenile Justice shall maintain
22		and administer all State youth centers pursuant to
23		subsection (d) of Section 3-2.5-20.
24		Pursuant to its power to establish new institutions
25		and facilities, the Department may authorize the
26		Department of Central Management Services to accept bids

SB3865 Engrossed - 601 - LRB102 24242 RJF 33473 b
1		from counties and municipalities for the construction,
2		remodeling, or conversion of a structure to be leased to
3		the Department of Corrections for the purposes of its
4		serving as a correctional institution or facility. Such
5		construction, remodeling, or conversion may be financed
6		with revenue bonds issued pursuant to the Industrial
7		Building Revenue Bond Act by the municipality or county.
8		The lease specified in a bid shall be for a term of not
9		less than the time needed to retire any revenue bonds used
10		to finance the project, but not to exceed 40 years. The
11		lease may grant to the State the option to purchase the
12		structure outright.
13		Upon receipt of the bids, the Department may certify
14		one or more of the bids and shall submit any such bids to
15		the General Assembly for approval. Upon approval of a bid
16		by a constitutional majority of both houses of the General
17		Assembly, pursuant to joint resolution, the Department of
18		Central Management Services may enter into an agreement
19		with the county or municipality pursuant to such bid.
20		(c-5) To build and maintain regional juvenile
21		detention centers and to charge a per diem to the counties
22		as established by the Department to defray the costs of
23		housing each minor in a center. In this subsection (c-5),
24		"juvenile detention center" means a facility to house
25		minors during pendency of trial who have been transferred
26		from proceedings under the Juvenile Court Act of 1987 to

SB3865 Engrossed - 602 - LRB102 24242 RJF 33473 b
1		prosecutions under the criminal laws of this State in
2		accordance with Section 5-805 of the Juvenile Court Act of
3		1987, whether the transfer was by operation of law or
4		permissive under that Section. The Department shall
5		designate the counties to be served by each regional
6		juvenile detention center.
7		(d) To develop and maintain programs of control,
8		rehabilitation, and employment of committed persons within
9		its institutions.
10		(d-5) To provide a pre-release job preparation program
11		for inmates at Illinois adult correctional centers.
12		(d-10) To provide educational and visitation
13		opportunities to committed persons within its institutions
14		through temporary access to content-controlled tablets
15		that may be provided as a privilege to committed persons
16		to induce or reward compliance.
17		(e) To establish a system of supervision and guidance
18		of committed persons in the community.
19		(f) To establish in cooperation with the Department of
20		Transportation to supply a sufficient number of prisoners
21		for use by the Department of Transportation to clean up
22		the trash and garbage along State, county, township, or
23		municipal highways as designated by the Department of
24		Transportation. The Department of Corrections, at the
25		request of the Department of Transportation, shall furnish
26		such prisoners at least annually for a period to be agreed

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1		upon between the Director of Corrections and the Secretary
2		of Transportation. The prisoners used on this program
3		shall be selected by the Director of Corrections on
4		whatever basis he deems proper in consideration of their
5		term, behavior and earned eligibility to participate in
6		such program - where they will be outside of the prison
7		facility but still in the custody of the Department of
8		Corrections. Prisoners convicted of first degree murder,
9		or a Class X felony, or armed violence, or aggravated
10		kidnapping, or criminal sexual assault, aggravated
11		criminal sexual abuse or a subsequent conviction for
12		criminal sexual abuse, or forcible detention, or arson, or
13		a prisoner adjudged a Habitual Criminal shall not be
14		eligible for selection to participate in such program. The
15		prisoners shall remain as prisoners in the custody of the
16		Department of Corrections and such Department shall
17		furnish whatever security is necessary. The Department of
18		Transportation shall furnish trucks and equipment for the
19		highway cleanup program and personnel to supervise and
20		direct the program. Neither the Department of Corrections
21		nor the Department of Transportation shall replace any
22		regular employee with a prisoner.
23		(g) To maintain records of persons committed to it and
24		to establish programs of research, statistics, and
25		planning.
26		(h) To investigate the grievances of any person

SB3865 Engrossed - 604 - LRB102 24242 RJF 33473 b
1		committed to the Department and to inquire into any
2		alleged misconduct by employees or committed persons; and
3		for these purposes it may issue subpoenas and compel the
4		attendance of witnesses and the production of writings and
5		papers, and may examine under oath any witnesses who may
6		appear before it; to also investigate alleged violations
7		of a parolee's or releasee's conditions of parole or
8		release; and for this purpose it may issue subpoenas and
9		compel the attendance of witnesses and the production of
10		documents only if there is reason to believe that such
11		procedures would provide evidence that such violations
12		have occurred.
13		If any person fails to obey a subpoena issued under
14		this subsection, the Director may apply to any circuit
15		court to secure compliance with the subpoena. The failure
16		to comply with the order of the court issued in response
17		thereto shall be punishable as contempt of court.
18		(i) To appoint and remove the chief administrative
19		officers, and administer programs of training and
20		development of personnel of the Department. Personnel
21		assigned by the Department to be responsible for the
22		custody and control of committed persons or to investigate
23		the alleged misconduct of committed persons or employees
24		or alleged violations of a parolee's or releasee's
25		conditions of parole shall be conservators of the peace
26		for those purposes, and shall have the full power of peace

SB3865 Engrossed - 605 - LRB102 24242 RJF 33473 b
1		officers outside of the facilities of the Department in
2		the protection, arrest, retaking, and reconfining of
3		committed persons or where the exercise of such power is
4		necessary to the investigation of such misconduct or
5		violations. This subsection shall not apply to persons
6		committed to the Department of Juvenile Justice under the
7		Juvenile Court Act of 1987 on aftercare release.
8		(j) To cooperate with other departments and agencies
9		and with local communities for the development of
10		standards and programs for better correctional services in
11		this State.
12		(k) To administer all moneys and properties of the
13		Department.
14		(l) To report annually to the Governor on the
15		committed persons, institutions, and programs of the
16		Department.
17		(l-5) (Blank).
18		(m) To make all rules and regulations and exercise all
19		powers and duties vested by law in the Department.
20		(n) To establish rules and regulations for
21		administering a system of sentence credits, established in
22		accordance with Section 3-6-3, subject to review by the
23		Prisoner Review Board.
24		(o) To administer the distribution of funds from the
25		State Treasury to reimburse counties where State penal
26		institutions are located for the payment of assistant

SB3865 Engrossed - 606 - LRB102 24242 RJF 33473 b
1		state's attorneys' salaries under Section 4-2001 of the
2		Counties Code.
3		(p) To exchange information with the Department of
4		Human Services and the Department of Healthcare and Family
5		Services for the purpose of verifying living arrangements
6		and for other purposes directly connected with the
7		administration of this Code and the Illinois Public Aid
8		Code.
9		(q) To establish a diversion program.
10		The program shall provide a structured environment for
11		selected technical parole or mandatory supervised release
12		violators and committed persons who have violated the
13		rules governing their conduct while in work release. This
14		program shall not apply to those persons who have
15		committed a new offense while serving on parole or
16		mandatory supervised release or while committed to work
17		release.
18		Elements of the program shall include, but shall not
19		be limited to, the following:
20		(1) The staff of a diversion facility shall
21		provide supervision in accordance with required
22		objectives set by the facility.
23		(2) Participants shall be required to maintain
24		employment.
25		(3) Each participant shall pay for room and board
26		at the facility on a sliding-scale basis according to

SB3865 Engrossed - 607 - LRB102 24242 RJF 33473 b
1		the participant's income.
2		(4) Each participant shall:
3		(A) provide restitution to victims in
4		accordance with any court order;
5		(B) provide financial support to his
6		dependents; and
7		(C) make appropriate payments toward any other
8		court-ordered obligations.
9		(5) Each participant shall complete community
10		service in addition to employment.
11		(6) Participants shall take part in such
12		counseling, educational, and other programs as the
13		Department may deem appropriate.
14		(7) Participants shall submit to drug and alcohol
15		screening.
16		(8) The Department shall promulgate rules
17		governing the administration of the program.
18		(r) To enter into intergovernmental cooperation
19		agreements under which persons in the custody of the
20		Department may participate in a county impact
21		incarceration program established under Section 3-6038 or
22		3-15003.5 of the Counties Code.
23		(r-5) (Blank).
24		(r-10) To systematically and routinely identify with
25		respect to each streetgang active within the correctional
26		system: (1) each active gang; (2) every existing

SB3865 Engrossed - 608 - LRB102 24242 RJF 33473 b
1		inter-gang affiliation or alliance; and (3) the current
2		leaders in each gang. The Department shall promptly
3		segregate leaders from inmates who belong to their gangs
4		and allied gangs. "Segregate" means no physical contact
5		and, to the extent possible under the conditions and space
6		available at the correctional facility, prohibition of
7		visual and sound communication. For the purposes of this
8		paragraph (r-10), "leaders" means persons who:
9		(i) are members of a criminal streetgang;
10		(ii) with respect to other individuals within the
11		streetgang, occupy a position of organizer,
12		supervisor, or other position of management or
13		leadership; and
14		(iii) are actively and personally engaged in
15		directing, ordering, authorizing, or requesting
16		commission of criminal acts by others, which are
17		punishable as a felony, in furtherance of streetgang
18		related activity both within and outside of the
19		Department of Corrections.
20		"Streetgang", "gang", and "streetgang related" have the
21		meanings ascribed to them in Section 10 of the Illinois
22		Streetgang Terrorism Omnibus Prevention Act.
23		(s) To operate a super-maximum security institution,
24		in order to manage and supervise inmates who are
25		disruptive or dangerous and provide for the safety and
26		security of the staff and the other inmates.

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1		(t) To monitor any unprivileged conversation or any
2		unprivileged communication, whether in person or by mail,
3		telephone, or other means, between an inmate who, before
4		commitment to the Department, was a member of an organized
5		gang and any other person without the need to show cause or
6		satisfy any other requirement of law before beginning the
7		monitoring, except as constitutionally required. The
8		monitoring may be by video, voice, or other method of
9		recording or by any other means. As used in this
10		subdivision (1)(t), "organized gang" has the meaning
11		ascribed to it in Section 10 of the Illinois Streetgang
12		Terrorism Omnibus Prevention Act.
13		As used in this subdivision (1)(t), "unprivileged
14		conversation" or "unprivileged communication" means a
15		conversation or communication that is not protected by any
16		privilege recognized by law or by decision, rule, or order
17		of the Illinois Supreme Court.
18		(u) To establish a Women's and Children's Pre-release
19		Community Supervision Program for the purpose of providing
20		housing and services to eligible female inmates, as
21		determined by the Department, and their newborn and young
22		children.
23		(u-5) To issue an order, whenever a person committed
24		to the Department absconds or absents himself or herself,
25		without authority to do so, from any facility or program
26		to which he or she is assigned. The order shall be

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1		certified by the Director, the Supervisor of the
2		Apprehension Unit, or any person duly designated by the
3		Director, with the seal of the Department affixed. The
4		order shall be directed to all sheriffs, coroners, and
5		police officers, or to any particular person named in the
6		order. Any order issued pursuant to this subdivision
7		(1)(u-5) shall be sufficient warrant for the officer or
8		person named in the order to arrest and deliver the
9		committed person to the proper correctional officials and
10		shall be executed the same as criminal process.
11		(u-6) To appoint a point of contact person who shall
12		receive suggestions, complaints, or other requests to the
13		Department from visitors to Department institutions or
14		facilities and from other members of the public.
15		(v) To do all other acts necessary to carry out the
16		provisions of this Chapter.
17		(2) The Department of Corrections shall by January 1,
18		1998, consider building and operating a correctional facility
19		within 100 miles of a county of over 2,000,000 inhabitants,
20		especially a facility designed to house juvenile participants
21		in the impact incarceration program.
22		(3) When the Department lets bids for contracts for
23		medical services to be provided to persons committed to
24		Department facilities by a health maintenance organization,
25		medical service corporation, or other health care provider,
26		the bid may only be let to a health care provider that has

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1		obtained an irrevocable letter of credit or performance bond
2		issued by a company whose bonds have an investment grade or
3		higher rating by a bond rating organization.
4		(4) When the Department lets bids for contracts for food
5		or commissary services to be provided to Department
6		facilities, the bid may only be let to a food or commissary
7		services provider that has obtained an irrevocable letter of
8		credit or performance bond issued by a company whose bonds
9		have an investment grade or higher rating by a bond rating
10		organization.
11		(5) On and after the date 6 months after August 16, 2013
12		(the effective date of Public Act 98-488), as provided in the
13		Executive Order 1 (2012) Implementation Act, all of the
14		powers, duties, rights, and responsibilities related to State
15		healthcare purchasing under this Code that were transferred
16		from the Department of Corrections to the Department of
17		Healthcare and Family Services by Executive Order 3 (2005) are
18		transferred back to the Department of Corrections; however,
19		powers, duties, rights, and responsibilities related to State
20		healthcare purchasing under this Code that were exercised by
21		the Department of Corrections before the effective date of
22		Executive Order 3 (2005) but that pertain to individuals
23		resident in facilities operated by the Department of Juvenile
24		Justice are transferred to the Department of Juvenile Justice.
25		(Source: P.A. 101-235, eff. 1-1-20; 102-350, eff. 8-13-21;
26		102-535, eff. 1-1-22; 102-538, eff. 8-20-21; revised

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1		10-15-21.)
2		(730 ILCS 5/5-5-3)
3		Sec. 5-5-3. Disposition.
4		(a) (Blank).
5		(b) (Blank).
6		(c) (1) (Blank).
7		(2) A period of probation, a term of periodic imprisonment
8		or conditional discharge shall not be imposed for the
9		following offenses. The court shall sentence the offender to
10		not less than the minimum term of imprisonment set forth in
11		this Code for the following offenses, and may order a fine or
12		restitution or both in conjunction with such term of
13		imprisonment:
14		(A) First degree murder where the death penalty is not
15		imposed.
16		(B) Attempted first degree murder.
17		(C) A Class X felony.
18		(D) A violation of Section 401.1 or 407 of the
19		Illinois Controlled Substances Act, or a violation of
20		subdivision (c)(1.5) of Section 401 of that Act which
21		relates to more than 5 grams of a substance containing
22		fentanyl or an analog thereof.
23		(D-5) A violation of subdivision (c)(1) of Section 401
24		of the Illinois Controlled Substances Act which relates to
25		3 or more grams of a substance containing heroin or an

SB3865 Engrossed - 613 - LRB102 24242 RJF 33473 b
1		analog thereof.
2		(E) (Blank).
3		(F) A Class 1 or greater felony if the offender had
4		been convicted of a Class 1 or greater felony, including
5		any state or federal conviction for an offense that
6		contained, at the time it was committed, the same elements
7		as an offense now (the date of the offense committed after
8		the prior Class 1 or greater felony) classified as a Class
9		1 or greater felony, within 10 years of the date on which
10		the offender committed the offense for which he or she is
11		being sentenced, except as otherwise provided in Section
12		40-10 of the Substance Use Disorder Act.
13		(F-3) A Class 2 or greater felony sex offense or
14		felony firearm offense if the offender had been convicted
15		of a Class 2 or greater felony, including any state or
16		federal conviction for an offense that contained, at the
17		time it was committed, the same elements as an offense now
18		(the date of the offense committed after the prior Class 2
19		or greater felony) classified as a Class 2 or greater
20		felony, within 10 years of the date on which the offender
21		committed the offense for which he or she is being
22		sentenced, except as otherwise provided in Section 40-10
23		of the Substance Use Disorder Act.
24		(F-5) A violation of Section 24-1, 24-1.1, or 24-1.6
25		of the Criminal Code of 1961 or the Criminal Code of 2012
26		for which imprisonment is prescribed in those Sections.

SB3865 Engrossed - 614 - LRB102 24242 RJF 33473 b
1		(G) Residential burglary, except as otherwise provided
2		in Section 40-10 of the Substance Use Disorder Act.
3		(H) Criminal sexual assault.
4		(I) Aggravated battery of a senior citizen as
5		described in Section 12-4.6 or subdivision (a)(4) of
6		Section 12-3.05 of the Criminal Code of 1961 or the
7		Criminal Code of 2012.
8		(J) A forcible felony if the offense was related to
9		the activities of an organized gang.
10		Before July 1, 1994, for the purposes of this
11		paragraph, "organized gang" means an association of 5 or
12		more persons, with an established hierarchy, that
13		encourages members of the association to perpetrate crimes
14		or provides support to the members of the association who
15		do commit crimes.
16		Beginning July 1, 1994, for the purposes of this
17		paragraph, "organized gang" has the meaning ascribed to it
18		in Section 10 of the Illinois Streetgang Terrorism Omnibus
19		Prevention Act.
20		(K) Vehicular hijacking.
21		(L) A second or subsequent conviction for the offense
22		of hate crime when the underlying offense upon which the
23		hate crime is based is felony aggravated assault or felony
24		mob action.
25		(M) A second or subsequent conviction for the offense
26		of institutional vandalism if the damage to the property

SB3865 Engrossed - 615 - LRB102 24242 RJF 33473 b
1		exceeds $300.
2		(N) A Class 3 felony violation of paragraph (1) of
3		subsection (a) of Section 2 of the Firearm Owners
4		Identification Card Act.
5		(O) A violation of Section 12-6.1 or 12-6.5 of the
6		Criminal Code of 1961 or the Criminal Code of 2012.
7		(P) A violation of paragraph (1), (2), (3), (4), (5),
8		or (7) of subsection (a) of Section 11-20.1 of the
9		Criminal Code of 1961 or the Criminal Code of 2012.
10		(P-5) A violation of paragraph (6) of subsection (a)
11		of Section 11-20.1 of the Criminal Code of 1961 or the
12		Criminal Code of 2012 if the victim is a household or
13		family member of the defendant.
14		(Q) A violation of subsection (b) or (b-5) of Section
15		20-1, Section 20-1.2, or Section 20-1.3 of the Criminal
16		Code of 1961 or the Criminal Code of 2012.
17		(R) A violation of Section 24-3A of the Criminal Code
18		of 1961 or the Criminal Code of 2012.
19		(S) (Blank).
20		(T) (Blank).
21		(U) A second or subsequent violation of Section 6-303
22		of the Illinois Vehicle Code committed while his or her
23		driver's license, permit, or privilege was revoked because
24		of a violation of Section 9-3 of the Criminal Code of 1961
25		or the Criminal Code of 2012, relating to the offense of
26		reckless homicide, or a similar provision of a law of

SB3865 Engrossed - 616 - LRB102 24242 RJF 33473 b
1		another state.
2		(V) A violation of paragraph (4) of subsection (c) of
3		Section 11-20.1B or paragraph (4) of subsection (c) of
4		Section 11-20.3 of the Criminal Code of 1961, or paragraph
5		(6) of subsection (a) of Section 11-20.1 of the Criminal
6		Code of 2012 when the victim is under 13 years of age and
7		the defendant has previously been convicted under the laws
8		of this State or any other state of the offense of child
9		pornography, aggravated child pornography, aggravated
10		criminal sexual abuse, aggravated criminal sexual assault,
11		predatory criminal sexual assault of a child, or any of
12		the offenses formerly known as rape, deviate sexual
13		assault, indecent liberties with a child, or aggravated
14		indecent liberties with a child where the victim was under
15		the age of 18 years or an offense that is substantially
16		equivalent to those offenses.
17		(W) A violation of Section 24-3.5 of the Criminal Code
18		of 1961 or the Criminal Code of 2012.
19		(X) A violation of subsection (a) of Section 31-1a of
20		the Criminal Code of 1961 or the Criminal Code of 2012.
21		(Y) A conviction for unlawful possession of a firearm
22		by a street gang member when the firearm was loaded or
23		contained firearm ammunition.
24		(Z) A Class 1 felony committed while he or she was
25		serving a term of probation or conditional discharge for a
26		felony.

SB3865 Engrossed - 617 - LRB102 24242 RJF 33473 b
1		(AA) Theft of property exceeding $500,000 and not
2		exceeding $1,000,000 in value.
3		(BB) Laundering of criminally derived property of a
4		value exceeding $500,000.
5		(CC) Knowingly selling, offering for sale, holding for
6		sale, or using 2,000 or more counterfeit items or
7		counterfeit items having a retail value in the aggregate
8		of $500,000 or more.
9		(DD) A conviction for aggravated assault under
10		paragraph (6) of subsection (c) of Section 12-2 of the
11		Criminal Code of 1961 or the Criminal Code of 2012 if the
12		firearm is aimed toward the person against whom the
13		firearm is being used.
14		(EE) A conviction for a violation of paragraph (2) of
15		subsection (a) of Section 24-3B of the Criminal Code of
16		2012.
17		(3) (Blank).
18		(4) A minimum term of imprisonment of not less than 10
19		consecutive days or 30 days of community service shall be
20		imposed for a violation of paragraph (c) of Section 6-303 of
21		the Illinois Vehicle Code.
22		(4.1) (Blank).
23		(4.2) Except as provided in paragraphs (4.3) and (4.8) of
24		this subsection (c), a minimum of 100 hours of community
25		service shall be imposed for a second violation of Section
26		6-303 of the Illinois Vehicle Code.

SB3865 Engrossed - 618 - LRB102 24242 RJF 33473 b
1		(4.3) A minimum term of imprisonment of 30 days or 300
2		hours of community service, as determined by the court, shall
3		be imposed for a second violation of subsection (c) of Section
4		6-303 of the Illinois Vehicle Code.
5		(4.4) Except as provided in paragraphs (4.5), (4.6), and
6		(4.9) of this subsection (c), a minimum term of imprisonment
7		of 30 days or 300 hours of community service, as determined by
8		the court, shall be imposed for a third or subsequent
9		violation of Section 6-303 of the Illinois Vehicle Code. The
10		court may give credit toward the fulfillment of community
11		service hours for participation in activities and treatment as
12		determined by court services.
13		(4.5) A minimum term of imprisonment of 30 days shall be
14		imposed for a third violation of subsection (c) of Section
15		6-303 of the Illinois Vehicle Code.
16		(4.6) Except as provided in paragraph (4.10) of this
17		subsection (c), a minimum term of imprisonment of 180 days
18		shall be imposed for a fourth or subsequent violation of
19		subsection (c) of Section 6-303 of the Illinois Vehicle Code.
20		(4.7) A minimum term of imprisonment of not less than 30
21		consecutive days, or 300 hours of community service, shall be
22		imposed for a violation of subsection (a-5) of Section 6-303
23		of the Illinois Vehicle Code, as provided in subsection (b-5)
24		of that Section.
25		(4.8) A mandatory prison sentence shall be imposed for a
26		second violation of subsection (a-5) of Section 6-303 of the

SB3865 Engrossed - 619 - LRB102 24242 RJF 33473 b
1		Illinois Vehicle Code, as provided in subsection (c-5) of that
2		Section. The person's driving privileges shall be revoked for
3		a period of not less than 5 years from the date of his or her
4		release from prison.
5		(4.9) A mandatory prison sentence of not less than 4 and
6		not more than 15 years shall be imposed for a third violation
7		of subsection (a-5) of Section 6-303 of the Illinois Vehicle
8		Code, as provided in subsection (d-2.5) of that Section. The
9		person's driving privileges shall be revoked for the remainder
10		of his or her life.
11		(4.10) A mandatory prison sentence for a Class 1 felony
12		shall be imposed, and the person shall be eligible for an
13		extended term sentence, for a fourth or subsequent violation
14		of subsection (a-5) of Section 6-303 of the Illinois Vehicle
15		Code, as provided in subsection (d-3.5) of that Section. The
16		person's driving privileges shall be revoked for the remainder
17		of his or her life.
18		(5) The court may sentence a corporation or unincorporated
19		association convicted of any offense to:
20		(A) a period of conditional discharge;
21		(B) a fine;
22		(C) make restitution to the victim under Section 5-5-6
23		of this Code.
24		(5.1) In addition to any other penalties imposed, and
25		except as provided in paragraph (5.2) or (5.3), a person
26		convicted of violating subsection (c) of Section 11-907 of the

SB3865 Engrossed - 620 - LRB102 24242 RJF 33473 b
1		Illinois Vehicle Code shall have his or her driver's license,
2		permit, or privileges suspended for at least 90 days but not
3		more than one year, if the violation resulted in damage to the
4		property of another person.
5		(5.2) In addition to any other penalties imposed, and
6		except as provided in paragraph (5.3), a person convicted of
7		violating subsection (c) of Section 11-907 of the Illinois
8		Vehicle Code shall have his or her driver's license, permit,
9		or privileges suspended for at least 180 days but not more than
10		2 years, if the violation resulted in injury to another
11		person.
12		(5.3) In addition to any other penalties imposed, a person
13		convicted of violating subsection (c) of Section 11-907 of the
14		Illinois Vehicle Code shall have his or her driver's license,
15		permit, or privileges suspended for 2 years, if the violation
16		resulted in the death of another person.
17		(5.4) In addition to any other penalties imposed, a person
18		convicted of violating Section 3-707 of the Illinois Vehicle
19		Code shall have his or her driver's license, permit, or
20		privileges suspended for 3 months and until he or she has paid
21		a reinstatement fee of $100.
22		(5.5) In addition to any other penalties imposed, a person
23		convicted of violating Section 3-707 of the Illinois Vehicle
24		Code during a period in which his or her driver's license,
25		permit, or privileges were suspended for a previous violation
26		of that Section shall have his or her driver's license,

SB3865 Engrossed - 621 - LRB102 24242 RJF 33473 b
1		permit, or privileges suspended for an additional 6 months
2		after the expiration of the original 3-month suspension and
3		until he or she has paid a reinstatement fee of $100.
4		(6) (Blank).
5		(7) (Blank).
6		(8) (Blank).
7		(9) A defendant convicted of a second or subsequent
8		offense of ritualized abuse of a child may be sentenced to a
9		term of natural life imprisonment.
10		(10) (Blank).
11		(11) The court shall impose a minimum fine of $1,000 for a
12		first offense and $2,000 for a second or subsequent offense
13		upon a person convicted of or placed on supervision for
14		battery when the individual harmed was a sports official or
15		coach at any level of competition and the act causing harm to
16		the sports official or coach occurred within an athletic
17		facility or within the immediate vicinity of the athletic
18		facility at which the sports official or coach was an active
19		participant of the athletic contest held at the athletic
20		facility. For the purposes of this paragraph (11), "sports
21		official" means a person at an athletic contest who enforces
22		the rules of the contest, such as an umpire or referee;
23		"athletic facility" means an indoor or outdoor playing field
24		or recreational area where sports activities are conducted;
25		and "coach" means a person recognized as a coach by the
26		sanctioning authority that conducted the sporting event.

SB3865 Engrossed - 622 - LRB102 24242 RJF 33473 b
1		(12) A person may not receive a disposition of court
2		supervision for a violation of Section 5-16 of the Boat
3		Registration and Safety Act if that person has previously
4		received a disposition of court supervision for a violation of
5		that Section.
6		(13) A person convicted of or placed on court supervision
7		for an assault or aggravated assault when the victim and the
8		offender are family or household members as defined in Section
9		103 of the Illinois Domestic Violence Act of 1986 or convicted
10		of domestic battery or aggravated domestic battery may be
11		required to attend a Partner Abuse Intervention Program under
12		protocols set forth by the Illinois Department of Human
13		Services under such terms and conditions imposed by the court.
14		The costs of such classes shall be paid by the offender.
15		(d) In any case in which a sentence originally imposed is
16		vacated, the case shall be remanded to the trial court. The
17		trial court shall hold a hearing under Section 5-4-1 of this
18		Code which may include evidence of the defendant's life, moral
19		character and occupation during the time since the original
20		sentence was passed. The trial court shall then impose
21		sentence upon the defendant. The trial court may impose any
22		sentence which could have been imposed at the original trial
23		subject to Section 5-5-4 of this Code. If a sentence is vacated
24		on appeal or on collateral attack due to the failure of the
25		trier of fact at trial to determine beyond a reasonable doubt
26		the existence of a fact (other than a prior conviction)

SB3865 Engrossed - 623 - LRB102 24242 RJF 33473 b
1		necessary to increase the punishment for the offense beyond
2		the statutory maximum otherwise applicable, either the
3		defendant may be re-sentenced to a term within the range
4		otherwise provided or, if the State files notice of its
5		intention to again seek the extended sentence, the defendant
6		shall be afforded a new trial.
7		(e) In cases where prosecution for aggravated criminal
8		sexual abuse under Section 11-1.60 or 12-16 of the Criminal
9		Code of 1961 or the Criminal Code of 2012 results in conviction
10		of a defendant who was a family member of the victim at the
11		time of the commission of the offense, the court shall
12		consider the safety and welfare of the victim and may impose a
13		sentence of probation only where:
14		(1) the court finds (A) or (B) or both are
15		appropriate:
16		(A) the defendant is willing to undergo a court
17		approved counseling program for a minimum duration of
18		2 years; or
19		(B) the defendant is willing to participate in a
20		court approved plan, including, but not limited to,
21		the defendant's:
22		(i) removal from the household;
23		(ii) restricted contact with the victim;
24		(iii) continued financial support of the
25		family;
26		(iv) restitution for harm done to the victim;

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1		and
2		(v) compliance with any other measures that
3		the court may deem appropriate; and
4		(2) the court orders the defendant to pay for the
5		victim's counseling services, to the extent that the court
6		finds, after considering the defendant's income and
7		assets, that the defendant is financially capable of
8		paying for such services, if the victim was under 18 years
9		of age at the time the offense was committed and requires
10		counseling as a result of the offense.
11		Probation may be revoked or modified pursuant to Section
12		5-6-4; except where the court determines at the hearing that
13		the defendant violated a condition of his or her probation
14		restricting contact with the victim or other family members or
15		commits another offense with the victim or other family
16		members, the court shall revoke the defendant's probation and
17		impose a term of imprisonment.
18		For the purposes of this Section, "family member" and
19		"victim" shall have the meanings ascribed to them in Section
20		11-0.1 of the Criminal Code of 2012.
21		(f) (Blank).
22		(g) Whenever a defendant is convicted of an offense under
23		Sections 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, 11-14,
24		11-14.3, 11-14.4 except for an offense that involves keeping a
25		place of juvenile prostitution, 11-15, 11-15.1, 11-16, 11-17,
26		11-18, 11-18.1, 11-19, 11-19.1, 11-19.2, 12-13, 12-14,

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1		12-14.1, 12-15, or 12-16 of the Criminal Code of 1961 or the
2		Criminal Code of 2012, the defendant shall undergo medical
3		testing to determine whether the defendant has any sexually
4		transmissible disease, including a test for infection with
5		human immunodeficiency virus (HIV) or any other identified
6		causative agent of acquired immunodeficiency syndrome (AIDS).
7		Any such medical test shall be performed only by appropriately
8		licensed medical practitioners and may include an analysis of
9		any bodily fluids as well as an examination of the defendant's
10		person. Except as otherwise provided by law, the results of
11		such test shall be kept strictly confidential by all medical
12		personnel involved in the testing and must be personally
13		delivered in a sealed envelope to the judge of the court in
14		which the conviction was entered for the judge's inspection in
15		camera. Acting in accordance with the best interests of the
16		victim and the public, the judge shall have the discretion to
17		determine to whom, if anyone, the results of the testing may be
18		revealed. The court shall notify the defendant of the test
19		results. The court shall also notify the victim if requested
20		by the victim, and if the victim is under the age of 15 and if
21		requested by the victim's parents or legal guardian, the court
22		shall notify the victim's parents or legal guardian of the
23		test results. The court shall provide information on the
24		availability of HIV testing and counseling at Department of
25		Public Health facilities to all parties to whom the results of
26		the testing are revealed and shall direct the State's Attorney

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1		to provide the information to the victim when possible. The
2		court shall order that the cost of any such test shall be paid
3		by the county and may be taxed as costs against the convicted
4		defendant.
5		(g-5) When an inmate is tested for an airborne
6		communicable disease, as determined by the Illinois Department
7		of Public Health, including, but not limited to, tuberculosis,
8		the results of the test shall be personally delivered by the
9		warden or his or her designee in a sealed envelope to the judge
10		of the court in which the inmate must appear for the judge's
11		inspection in camera if requested by the judge. Acting in
12		accordance with the best interests of those in the courtroom,
13		the judge shall have the discretion to determine what if any
14		precautions need to be taken to prevent transmission of the
15		disease in the courtroom.
16		(h) Whenever a defendant is convicted of an offense under
17		Section 1 or 2 of the Hypodermic Syringes and Needles Act, the
18		defendant shall undergo medical testing to determine whether
19		the defendant has been exposed to human immunodeficiency virus
20		(HIV) or any other identified causative agent of acquired
21		immunodeficiency syndrome (AIDS). Except as otherwise provided
22		by law, the results of such test shall be kept strictly
23		confidential by all medical personnel involved in the testing
24		and must be personally delivered in a sealed envelope to the
25		judge of the court in which the conviction was entered for the
26		judge's inspection in camera. Acting in accordance with the

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1		best interests of the public, the judge shall have the
2		discretion to determine to whom, if anyone, the results of the
3		testing may be revealed. The court shall notify the defendant
4		of a positive test showing an infection with the human
5		immunodeficiency virus (HIV). The court shall provide
6		information on the availability of HIV testing and counseling
7		at Department of Public Health facilities to all parties to
8		whom the results of the testing are revealed and shall direct
9		the State's Attorney to provide the information to the victim
10		when possible. The court shall order that the cost of any such
11		test shall be paid by the county and may be taxed as costs
12		against the convicted defendant.
13		(i) All fines and penalties imposed under this Section for
14		any violation of Chapters 3, 4, 6, and 11 of the Illinois
15		Vehicle Code, or a similar provision of a local ordinance, and
16		any violation of the Child Passenger Protection Act, or a
17		similar provision of a local ordinance, shall be collected and
18		disbursed by the circuit clerk as provided under the Criminal
19		and Traffic Assessment Act.
20		(j) In cases when prosecution for any violation of Section
21		11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, 11-6, 11-8, 11-9,
22		11-11, 11-14, 11-14.3, 11-14.4, 11-15, 11-15.1, 11-16, 11-17,
23		11-17.1, 11-18, 11-18.1, 11-19, 11-19.1, 11-19.2, 11-20.1,
24		11-20.1B, 11-20.3, 11-21, 11-30, 11-40, 12-13, 12-14, 12-14.1,
25		12-15, or 12-16 of the Criminal Code of 1961 or the Criminal
26		Code of 2012, any violation of the Illinois Controlled

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1		Substances Act, any violation of the Cannabis Control Act, or
2		any violation of the Methamphetamine Control and Community
3		Protection Act results in conviction, a disposition of court
4		supervision, or an order of probation granted under Section 10
5		of the Cannabis Control Act, Section 410 of the Illinois
6		Controlled Substances Act, or Section 70 of the
7		Methamphetamine Control and Community Protection Act of a
8		defendant, the court shall determine whether the defendant is
9		employed by a facility or center as defined under the Child
10		Care Act of 1969, a public or private elementary or secondary
11		school, or otherwise works with children under 18 years of age
12		on a daily basis. When a defendant is so employed, the court
13		shall order the Clerk of the Court to send a copy of the
14		judgment of conviction or order of supervision or probation to
15		the defendant's employer by certified mail. If the employer of
16		the defendant is a school, the Clerk of the Court shall direct
17		the mailing of a copy of the judgment of conviction or order of
18		supervision or probation to the appropriate regional
19		superintendent of schools. The regional superintendent of
20		schools shall notify the State Board of Education of any
21		notification under this subsection.
22		(j-5) A defendant at least 17 years of age who is convicted
23		of a felony and who has not been previously convicted of a
24		misdemeanor or felony and who is sentenced to a term of
25		imprisonment in the Illinois Department of Corrections shall
26		as a condition of his or her sentence be required by the court

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1		to attend educational courses designed to prepare the
2		defendant for a high school diploma and to work toward a high
3		school diploma or to work toward passing high school
4		equivalency testing or to work toward completing a vocational
5		training program offered by the Department of Corrections. If
6		a defendant fails to complete the educational training
7		required by his or her sentence during the term of
8		incarceration, the Prisoner Review Board shall, as a condition
9		of mandatory supervised release, require the defendant, at his
10		or her own expense, to pursue a course of study toward a high
11		school diploma or passage of high school equivalency testing.
12		The Prisoner Review Board shall revoke the mandatory
13		supervised release of a defendant who wilfully fails to comply
14		with this subsection (j-5) upon his or her release from
15		confinement in a penal institution while serving a mandatory
16		supervised release term; however, the inability of the
17		defendant after making a good faith effort to obtain financial
18		aid or pay for the educational training shall not be deemed a
19		wilful failure to comply. The Prisoner Review Board shall
20		recommit the defendant whose mandatory supervised release term
21		has been revoked under this subsection (j-5) as provided in
22		Section 3-3-9. This subsection (j-5) does not apply to a
23		defendant who has a high school diploma or has successfully
24		passed high school equivalency testing. This subsection (j-5)
25		does not apply to a defendant who is determined by the court to
26		be a person with a developmental disability or otherwise

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1		mentally incapable of completing the educational or vocational
2		program.
3		(k) (Blank).
4		(l) (A) Except as provided in paragraph (C) of subsection
5		(l), whenever a defendant, who is not a citizen or national of
6		the United States an alien as defined by the Immigration and
7		Nationality Act, is convicted of any felony or misdemeanor
8		offense, the court after sentencing the defendant may, upon
9		motion of the State's Attorney, hold sentence in abeyance and
10		remand the defendant to the custody of the Attorney General of
11		the United States or his or her designated agent to be deported
12		when:
13		(1) a final order of deportation has been issued
14		against the defendant pursuant to proceedings under the
15		Immigration and Nationality Act, and
16		(2) the deportation of the defendant would not
17		deprecate the seriousness of the defendant's conduct and
18		would not be inconsistent with the ends of justice.
19		Otherwise, the defendant shall be sentenced as provided in
20		this Chapter V.
21		(B) If the defendant has already been sentenced for a
22		felony or misdemeanor offense, or has been placed on probation
23		under Section 10 of the Cannabis Control Act, Section 410 of
24		the Illinois Controlled Substances Act, or Section 70 of the
25		Methamphetamine Control and Community Protection Act, the
26		court may, upon motion of the State's Attorney to suspend the

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1		sentence imposed, commit the defendant to the custody of the
2		Attorney General of the United States or his or her designated
3		agent when:
4		(1) a final order of deportation has been issued
5		against the defendant pursuant to proceedings under the
6		Immigration and Nationality Act, and
7		(2) the deportation of the defendant would not
8		deprecate the seriousness of the defendant's conduct and
9		would not be inconsistent with the ends of justice.
10		(C) This subsection (l) does not apply to offenders who
11		are subject to the provisions of paragraph (2) of subsection
12		(a) of Section 3-6-3.
13		(D) Upon motion of the State's Attorney, if a defendant
14		sentenced under this Section returns to the jurisdiction of
15		the United States, the defendant shall be recommitted to the
16		custody of the county from which he or she was sentenced.
17		Thereafter, the defendant shall be brought before the
18		sentencing court, which may impose any sentence that was
19		available under Section 5-5-3 at the time of initial
20		sentencing. In addition, the defendant shall not be eligible
21		for additional earned sentence credit as provided under
22		Section 3-6-3.
23		(m) A person convicted of criminal defacement of property
24		under Section 21-1.3 of the Criminal Code of 1961 or the
25		Criminal Code of 2012, in which the property damage exceeds
26		$300 and the property damaged is a school building, shall be

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1		ordered to perform community service that may include cleanup,
2		removal, or painting over the defacement.
3		(n) The court may sentence a person convicted of a
4		violation of Section 12-19, 12-21, 16-1.3, or 17-56, or
5		subsection (a) or (b) of Section 12-4.4a, of the Criminal Code
6		of 1961 or the Criminal Code of 2012 (i) to an impact
7		incarceration program if the person is otherwise eligible for
8		that program under Section 5-8-1.1, (ii) to community service,
9		or (iii) if the person has a substance use disorder, as defined
10		in the Substance Use Disorder Act, to a treatment program
11		licensed under that Act.
12		(o) Whenever a person is convicted of a sex offense as
13		defined in Section 2 of the Sex Offender Registration Act, the
14		defendant's driver's license or permit shall be subject to
15		renewal on an annual basis in accordance with the provisions
16		of license renewal established by the Secretary of State.
17		(Source: P.A. 101-81, eff. 7-12-19; 102-168, eff. 7-27-21;
18		102-531, eff. 1-1-22; revised 10-12-21.)
19		Section 175. The Frauds Act is amended by changing Section
20		12 as follows:
21		(740 ILCS 80/12) (from Ch. 59, par. 12)
22		Sec. 12. When any lands, tenements or hereditaments, or
23		any rents or profits out of the same, shall descend to any
24		heir, or be devised to any devisee, and the personal estate of

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1		the ancestor of such heir or devisor of such devisee shall be
2		insufficient to discharge the just demands against such
3		ancestor, or devisor's estate, such heir or devisee shall be
4		liable to the creditor of their ancestor or devisor to the full
5		amount of the lands, tenements or hereditaments, or rents and
6		profits out of the same, as may descend or be devised to the
7		said heir or devisee; and in all cases where any heir or
8		devisee shall be liable to pay the debts of his executor or
9		devisor, in regard of any lands, tenements or hereditaments,
10		or any rent or profit arising out of the same, descending or
11		being devised to him, and shall sell, transfer, alien or make
12		over the same before any action brought, or process sued out
13		against him, such heir at law or devisee shall be answerable
14		for such debts to the value of the said lands, tenements and
15		hereditaments, rents or profits so by him transferred aliened
16		or made over; and executions may be taken out upon any judgment
17		so obtained against such heir or devisee, to the value of the
18		said lands, tenements and hereditaments, rents and profits,
19		out of the same, as if the same were his own proper debts,
20		saving and excepting that the lands and tenements, rents and
21		profits, by him bona fide transferred aliened, before the
22		action brought, shall not be liable to such execution.
23		(Source: R.S. 1874, p. 540.)
24		Section 180. The Income Withholding for Support Act is
25		amended by changing Section 20 as follows:

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1		(750 ILCS 28/20)
2		Sec. 20. Entry of order for support containing income
3		withholding provisions; income withholding notice.
4		(a) In addition to any content required under other laws,
5		every order for support entered on or after July 1, 1997,
6		shall:
7		(1) Require an income withholding notice to be
8		prepared and served immediately upon any payor of the
9		obligor by the obligee or public office, unless a written
10		agreement is reached between and signed by both parties
11		providing for an alternative arrangement, approved and
12		entered into the record by the court, which ensures
13		payment of support. In that case, the order for support
14		shall provide that an income withholding notice is to be
15		prepared and served only if the obligor becomes delinquent
16		in paying the order for support; and
17		(2) Contain a dollar amount to be paid until payment
18		in full of any delinquency that accrues after entry of the
19		order for support. The amount for payment of delinquency
20		shall not be less than 20% of the total of the current
21		support amount and the amount to be paid periodically for
22		payment of any arrearage stated in the order for support;
23		and
24		(3) Include the obligor's Social Security Number,
25		which the obligor shall disclose to the court. If the

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1		obligor is not a United States citizen, the obligor shall
2		disclose to the court, and the court shall include in the
3		order for support, the obligor's alien registration number
4		as a noncitizen, passport number, and home country's
5		social security or national health number, if applicable.
6		(b) At the time the order for support is entered, the Clerk
7		of the Circuit Court shall provide a copy of the order to the
8		obligor and shall make copies available to the obligee and
9		public office.
10		(c) The income withholding notice shall:
11		(1) be in the standard format prescribed by the
12		federal Department of Health and Human Services; and
13		(1.1) state the date of entry of the order for support
14		upon which the income withholding notice is based; and
15		(2) direct any payor to withhold the dollar amount
16		required for current support under the order for support;
17		and
18		(3) direct any payor to withhold the dollar amount
19		required to be paid periodically under the order for
20		support for payment of the amount of any arrearage stated
21		in the order for support; and
22		(4) direct any payor or labor union or trade union to
23		enroll a child as a beneficiary of a health insurance plan
24		and withhold or cause to be withheld, if applicable, any
25		required premiums; and
26		(5) state the amount of the payor income withholding

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1		fee specified under this Section; and
2		(6) state that the amount actually withheld from the
3		obligor's income for support and other purposes, including
4		the payor withholding fee specified under this Section,
5		may not be in excess of the maximum amount permitted under
6		the federal Consumer Credit Protection Act; and
7		(7) in bold face type, the size of which equals the
8		largest type on the notice, state the duties of the payor
9		and the fines and penalties for failure to withhold and
10		pay over income and for discharging, disciplining,
11		refusing to hire, or otherwise penalizing the obligor
12		because of the duty to withhold and pay over income under
13		this Section; and
14		(8) state the rights, remedies, and duties of the
15		obligor under this Section; and
16		(9) include the Social Security number of the obligor;
17		and
18		(10) (blank); and
19		(11) contain the signature of the obligee or the
20		printed name and telephone number of the authorized
21		representative of the public office, except that the
22		failure to contain the signature of the obligee or the
23		printed name and telephone number of the authorized
24		representative of the public office shall not affect the
25		validity of the income withholding notice; and
26		(12) direct any payor to pay over amounts withheld for

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1		payment of support to the State Disbursement Unit.
2		(d) The accrual of a delinquency as a condition for
3		service of an income withholding notice, under the exception
4		to immediate withholding in subsection (a) of this Section,
5		shall apply only to the initial service of an income
6		withholding notice on a payor of the obligor.
7		(e) Notwithstanding the exception to immediate withholding
8		contained in subsection (a) of this Section, if the court
9		finds at the time of any hearing that an arrearage has accrued,
10		the court shall order immediate service of an income
11		withholding notice upon the payor.
12		(f) If the order for support, under the exception to
13		immediate withholding contained in subsection (a) of this
14		Section, provides that an income withholding notice is to be
15		prepared and served only if the obligor becomes delinquent in
16		paying the order for support, the obligor may execute a
17		written waiver of that condition and request immediate service
18		on the payor.
19		(g) The obligee or public office may serve the income
20		withholding notice on the payor or its superintendent,
21		manager, or other agent by ordinary mail or certified mail
22		return receipt requested, by facsimile transmission or other
23		electronic means, by personal delivery, or by any method
24		provided by law for service of a summons. At the time of
25		service on the payor and as notice that withholding has
26		commenced, the obligee or public office shall serve a copy of

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1		the income withholding notice on the obligor by ordinary mail
2		addressed to his or her last known address. A copy of an income
3		withholding notice and proof of service shall be filed with
4		the Clerk of the Circuit Court only when necessary in
5		connection with a petition to contest, modify, suspend,
6		terminate, or correct an income withholding notice, an action
7		to enforce income withholding against a payor, or the
8		resolution of other disputes involving an income withholding
9		notice. The changes made to this subsection by this amendatory
10		Act of the 96th General Assembly apply on and after September
11		1, 2009.
12		(h) At any time after the initial service of an income
13		withholding notice, any other payor of the obligor may be
14		served with the same income withholding notice without further
15		notice to the obligor. A copy of the income withholding notice
16		together with a proof of service on the other payor shall be
17		filed with the Clerk of the Circuit Court.
18		(i) New service of an income withholding notice is not
19		required in order to resume withholding of income in the case
20		of an obligor with respect to whom an income withholding
21		notice was previously served on the payor if withholding of
22		income was terminated because of an interruption in the
23		obligor's employment of less than 180 days.
24		(Source: P.A. 97-994, eff. 8-17-12; 98-81, eff. 7-15-13.)
25		Section 185. The Property Owned By Aliens Act is amended

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1		by changing the title of the Act and Sections 0.01, 7, and 8 as
2		follows:
3		(765 ILCS 60/Act title)
4		An Act concerning the right of noncitizens aliens to
5		acquire and hold real and personal property.
6		(765 ILCS 60/0.01) (from Ch. 6, par. 0.01)
7		Sec. 0.01. Short title. This Act may be cited as the
8		Property Owned By Noncitizens Aliens Act.
9		(Source: P.A. 86-1324.)
10		(765 ILCS 60/7) (from Ch. 6, par. 7)
11		Sec. 7. All noncitizens aliens may acquire, hold, and
12		dispose of real and personal property in the same manner and to
13		the same extent as natural born citizens of the United States,
14		and the personal estate of a noncitizen an alien dying
15		intestate shall be distributed in the same manner as the
16		estates of natural born citizens, and all persons interested
17		in such estate shall be entitled to proper distributive shares
18		thereof under the laws of this state, whether they are
19		noncitizens aliens or not.
20		This amendatory Act of 1992 does not apply to the
21		Agricultural Foreign Investment Disclosure Act.
22		(Source: P.A. 87-1101.)

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1		(765 ILCS 60/8) (from Ch. 6, par. 8)
2		Sec. 8. An act in regard to noncitizens aliens and to
3		restrict their right to acquire and hold real and personal
4		estate and to provide for the disposition of the lands now
5		owned by non-resident noncitizens aliens, approved June 16,
6		1887, and in force July 1, 1887, and all other acts and parts
7		of acts in conflict with this act, are hereby repealed.
8		(Source: Laws 1897, p. 5.)
9		Section 190. The Property Taxes of Alien Landlords Act is
10		amended by changing the title of the Act and Sections 0.01 and
11		1 as follows:
12		(765 ILCS 725/Act title)
13		An Act to prevent noncitizen alien landlords from
14		including the payment of taxes in the rent of farm lands as a
15		part of the rental thereof.
16		(765 ILCS 725/0.01) (from Ch. 6, par. 8.9)
17		Sec. 0.01. Short title. This Act may be cited as the
18		Property Taxes Of Noncitizen Alien Landlords Act.
19		(Source: P.A. 86-1324.)
20		(765 ILCS 725/1) (from Ch. 6, par. 9)
21		Sec. 1. No contract, agreement or lease in writing or by
22		parol, by which any lands or tenements therein are demised or

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1		leased by any noncitizen alien or his agents for the purpose of
2		farming, cultivation or the raising of crops thereon, shall
3		contain any provision requiring the tenant or other person for
4		him, to pay taxes on said lands or tenements, or any part
5		thereof, and all such provisions, agreements and leases so
6		made are declared void as to the taxes aforesaid. If any
7		noncitizen alien landlord or his agents shall receive in
8		advance or at any other time any sum of money or article of
9		value from any tenant in lieu of such taxes, directly or
10		indirectly, the same may be recovered back by such tenant
11		before any court having jurisdiction of the amount thereof,
12		and all provisions or agreements in writing or otherwise to
13		pay such taxes shall be held in all courts of this state to be
14		void.
15		(Source: P.A. 81-1509.)
16		Section 195. The Illinois Human Rights Act is amended by
17		changing Section 2-101 as follows:
18		(775 ILCS 5/2-101)
19		Sec. 2-101. Definitions. The following definitions are
20		applicable strictly in the context of this Article.
21		(A) Employee.
22		(1) "Employee" includes:
23		(a) Any individual performing services for
24		remuneration within this State for an employer;

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1		(b) An apprentice;
2		(c) An applicant for any apprenticeship.
3		For purposes of subsection (D) of Section 2-102 of
4		this Act, "employee" also includes an unpaid intern. An
5		unpaid intern is a person who performs work for an
6		employer under the following circumstances:
7		(i) the employer is not committed to hiring the
8		person performing the work at the conclusion of the
9		intern's tenure;
10		(ii) the employer and the person performing the
11		work agree that the person is not entitled to wages for
12		the work performed; and
13		(iii) the work performed:
14		(I) supplements training given in an
15		educational environment that may enhance the
16		employability of the intern;
17		(II) provides experience for the benefit of
18		the person performing the work;
19		(III) does not displace regular employees;
20		(IV) is performed under the close supervision
21		of existing staff; and
22		(V) provides no immediate advantage to the
23		employer providing the training and may
24		occasionally impede the operations of the
25		employer.
26		(2) "Employee" does not include:

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1		(a) (Blank);
2		(b) Individuals employed by persons who are not
3		"employers" as defined by this Act;
4		(c) Elected public officials or the members of
5		their immediate personal staffs;
6		(d) Principal administrative officers of the State
7		or of any political subdivision, municipal corporation
8		or other governmental unit or agency;
9		(e) A person in a vocational rehabilitation
10		facility certified under federal law who has been
11		designated an evaluee, trainee, or work activity
12		client.
13		(B) Employer.
14		(1) "Employer" includes:
15		(a) Any person employing one or more employees
16		within Illinois during 20 or more calendar weeks
17		within the calendar year of or preceding the alleged
18		violation;
19		(b) Any person employing one or more employees
20		when a complainant alleges civil rights violation due
21		to unlawful discrimination based upon his or her
22		physical or mental disability unrelated to ability,
23		pregnancy, or sexual harassment;
24		(c) The State and any political subdivision,
25		municipal corporation or other governmental unit or
26		agency, without regard to the number of employees;

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1		(d) Any party to a public contract without regard
2		to the number of employees;
3		(e) A joint apprenticeship or training committee
4		without regard to the number of employees.
5		(2) "Employer" does not include any place of worship,
6		religious corporation, association, educational
7		institution, society, or non-profit nursing institution
8		conducted by and for those who rely upon treatment by
9		prayer through spiritual means in accordance with the
10		tenets of a recognized church or religious denomination
11		with respect to the employment of individuals of a
12		particular religion to perform work connected with the
13		carrying on by such place of worship, corporation,
14		association, educational institution, society or
15		non-profit nursing institution of its activities.
16		(C) Employment Agency. "Employment Agency" includes both
17		public and private employment agencies and any person, labor
18		organization, or labor union having a hiring hall or hiring
19		office regularly undertaking, with or without compensation, to
20		procure opportunities to work, or to procure, recruit, refer
21		or place employees.
22		(D) Labor Organization. "Labor Organization" includes any
23		organization, labor union, craft union, or any voluntary
24		unincorporated association designed to further the cause of
25		the rights of union labor which is constituted for the
26		purpose, in whole or in part, of collective bargaining or of

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1		dealing with employers concerning grievances, terms or
2		conditions of employment, or apprenticeships or applications
3		for apprenticeships, or of other mutual aid or protection in
4		connection with employment, including apprenticeships or
5		applications for apprenticeships.
6		(E) Sexual Harassment. "Sexual harassment" means any
7		unwelcome sexual advances or requests for sexual favors or any
8		conduct of a sexual nature when (1) submission to such conduct
9		is made either explicitly or implicitly a term or condition of
10		an individual's employment, (2) submission to or rejection of
11		such conduct by an individual is used as the basis for
12		employment decisions affecting such individual, or (3) such
13		conduct has the purpose or effect of substantially interfering
14		with an individual's work performance or creating an
15		intimidating, hostile or offensive working environment.
16		For purposes of this definition, the phrase "working
17		environment" is not limited to a physical location an employee
18		is assigned to perform his or her duties.
19		(E-1) Harassment. "Harassment" means any unwelcome conduct
20		on the basis of an individual's actual or perceived race,
21		color, religion, national origin, ancestry, age, sex, marital
22		status, order of protection status, disability, military
23		status, sexual orientation, pregnancy, unfavorable discharge
24		from military service, citizenship status, or work
25		authorization status that has the purpose or effect of
26		substantially interfering with the individual's work

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1		performance or creating an intimidating, hostile, or offensive
2		working environment. For purposes of this definition, the
3		phrase "working environment" is not limited to a physical
4		location an employee is assigned to perform his or her duties.
5		(F) Religion. "Religion" with respect to employers
6		includes all aspects of religious observance and practice, as
7		well as belief, unless an employer demonstrates that he is
8		unable to reasonably accommodate an employee's or prospective
9		employee's religious observance or practice without undue
10		hardship on the conduct of the employer's business.
11		(G) Public Employer. "Public employer" means the State, an
12		agency or department thereof, unit of local government, school
13		district, instrumentality or political subdivision.
14		(H) Public Employee. "Public employee" means an employee
15		of the State, agency or department thereof, unit of local
16		government, school district, instrumentality or political
17		subdivision. "Public employee" does not include public
18		officers or employees of the General Assembly or agencies
19		thereof.
20		(I) Public Officer. "Public officer" means a person who is
21		elected to office pursuant to the Constitution or a statute or
22		ordinance, or who is appointed to an office which is
23		established, and the qualifications and duties of which are
24		prescribed, by the Constitution or a statute or ordinance, to
25		discharge a public duty for the State, agency or department
26		thereof, unit of local government, school district,

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1		instrumentality or political subdivision.
2		(J) Eligible Bidder. "Eligible bidder" means a person who,
3		prior to contract award or prior to bid opening for State
4		contracts for construction or construction-related services,
5		has filed with the Department a properly completed, sworn and
6		currently valid employer report form, pursuant to the
7		Department's regulations. The provisions of this Article
8		relating to eligible bidders apply only to bids on contracts
9		with the State and its departments, agencies, boards, and
10		commissions, and the provisions do not apply to bids on
11		contracts with units of local government or school districts.
12		(K) Citizenship Status. "Citizenship status" means the
13		status of being:
14		(1) a born U.S. citizen;
15		(2) a naturalized U.S. citizen;
16		(3) a U.S. national; or
17		(4) a person born outside the United States and not a
18		U.S. citizen who is not an unauthorized noncitizen alien
19		and who is protected from discrimination under the
20		provisions of Section 1324b of Title 8 of the United
21		States Code, as now or hereafter amended.
22		(L) Work Authorization Status. "Work authorization status"
23		means the status of being a person born outside of the United
24		States, and not a U.S. citizen, who is authorized by the
25		federal government to work in the United States.
26		(Source: P.A. 101-221, eff. 1-1-20; 101-430, eff. 7-1-20;

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1		102-233, eff. 8-2-21; 102-558, eff. 8-20-21.)
2		Section 200. The Resident Alien Course Act is amended by
3		changing the title of the Act and Sections 0.01, 1, 2, and 3 as
4		follows:
5		(815 ILCS 400/Act title)
6		An Act concerning fees charged for courses offered to
7		persons seeking permanent resident noncitizen alien status
8		under the Immigration Reform and Control Act of 1986.
9		(815 ILCS 400/0.01) (from Ch. 111, par. 8050)
10		Sec. 0.01. Short title. This Act may be cited as the
11		Resident Noncitizen Alien Course Act.
12		(Source: P.A. 86-1324.)
13		(815 ILCS 400/1) (from Ch. 111, par. 8051)
14		Sec. 1. No individual or agency, authorized by the U.S.
15		Immigration and Naturalization Service to offer a course
16		leading to a certificate of satisfactory pursuit for issuance
17		of permanent resident noncitizen alien status, may charge a
18		fee for such course in excess of $5 per hour per individual up
19		to the first 60 hours of instruction or $500 for up to 12
20		months of instruction from the date of registration. As used
21		in this Section, the term "fee" includes all costs associated
22		with the course, including the costs of instruction and

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1		materials.
2		(Source: P.A. 86-831.)
3		(815 ILCS 400/2) (from Ch. 111, par. 8052)
4		Sec. 2. No individual or agency which offers any service
5		or course with the promise of preparing the recipient or
6		enrollee for the English and civics exam of the U.S.
7		Immigration and Naturalization Service for issuance of
8		permanent resident noncitizen alien status may charge a fee
9		for such service or course in excess of $5 per hour per
10		individual up to the first 60 hours of instruction or $500 for
11		up to 12 months of instruction from the date of registration.
12		As used in this Section, the term "fee" includes all costs
13		associated with the service or course, including the costs of
14		instruction and materials.
15		(Source: P.A. 86-831.)
16		(815 ILCS 400/3) (from Ch. 111, par. 8053)
17		Sec. 3. Any individual or agency offering a course or
18		service described in Section 2 shall include within any
19		literature or print or electronic advertisement for such
20		service or course a statement that such service or course is
21		designed to prepare the recipient or enrollee for the English
22		and civics exam of the U.S. Immigration and Naturalization
23		Service and that the individual or agency offering the service
24		or course does not issue the certificate of satisfactory

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1		pursuit required by the U.S. Immigration and Naturalization
2		Service for issuance of permanent resident noncitizen alien
3		status.
4		(Source: P.A. 86-831.)
5		Section 205. The Consumer Fraud and Deceptive Business
6		Practices Act is amended by changing Section 2AA as follows:
7		(815 ILCS 505/2AA)
8		Sec. 2AA. Immigration services.
9		(a) "Immigration matter" means any proceeding, filing, or
10		action affecting the nonimmigrant, immigrant or citizenship
11		status of any person that arises under immigration and
12		naturalization law, executive order or presidential
13		proclamation of the United States or any foreign country, or
14		that arises under action of the United States Citizenship and
15		Immigration Services, the United States Department of Labor,
16		or the United States Department of State.
17		"Immigration assistance service" means any information or
18		action provided or offered to customers or prospective
19		customers related to immigration matters, excluding legal
20		advice, recommending a specific course of legal action, or
21		providing any other assistance that requires legal analysis,
22		legal judgment, or interpretation of the law.
23		"Compensation" means money, property, services, promise of
24		payment, or anything else of value.

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1		"Employed by" means that a person is on the payroll of the
2		employer and the employer deducts from the employee's paycheck
3		social security and withholding taxes, or receives
4		compensation from the employer on a commission basis or as an
5		independent contractor.
6		"Reasonable costs" means actual costs or, if actual costs
7		cannot be calculated, reasonably estimated costs of such
8		things as photocopying, telephone calls, document requests,
9		and filing fees for immigration forms, and other nominal costs
10		incidental to assistance in an immigration matter.
11		(a-1) The General Assembly finds and declares that private
12		individuals who assist persons with immigration matters have a
13		significant impact on the ability of their clients to reside
14		and work within the United States and to establish and
15		maintain stable families and business relationships. The
16		General Assembly further finds that that assistance and its
17		impact also have a significant effect on the cultural, social,
18		and economic life of the State of Illinois and thereby
19		substantially affect the public interest. It is the intent of
20		the General Assembly to establish rules of practice and
21		conduct for those individuals to promote honesty and fair
22		dealing with residents and to preserve public confidence.
23		(a-5) The following persons are exempt from this Section,
24		provided they prove the exemption by a preponderance of the
25		evidence:
26		(1) An attorney licensed to practice law in any state

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1		or territory of the United States, or of any foreign
2		country when authorized by the Illinois Supreme Court, to
3		the extent the attorney renders immigration assistance
4		service in the course of his or her practice as an
5		attorney.
6		(2) A legal intern, as described by the rules of the
7		Illinois Supreme Court, employed by and under the direct
8		supervision of a licensed attorney and rendering
9		immigration assistance service in the course of the
10		intern's employment.
11		(3) A not-for-profit organization recognized by the
12		Board of Immigration Appeals under 8 CFR 292.2(a) and
13		employees of those organizations accredited under 8 CFR
14		292.2(d).
15		(4) Any organization employing or desiring to employ a
16		documented or undocumented immigrant or nonimmigrant
17		alien, where the organization, its employees or its agents
18		provide advice or assistance in immigration matters to
19		documented or undocumented immigrant or nonimmigrant alien
20		employees or potential employees without compensation from
21		the individuals to whom such advice or assistance is
22		provided.
23		Nothing in this Section shall regulate any business to the
24		extent that such regulation is prohibited or preempted by
25		State or federal law.
26		All other persons providing or offering to provide

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1		immigration assistance service shall be subject to this
2		Section.
3		(b) Any person who provides or offers to provide
4		immigration assistance service may perform only the following
5		services:
6		(1) Completing a government agency form, requested by
7		the customer and appropriate to the customer's needs, only
8		if the completion of that form does not involve a legal
9		judgment for that particular matter.
10		(2) Transcribing responses to a government agency form
11		which is related to an immigration matter, but not
12		advising a customer as to his or her answers on those
13		forms.
14		(3) Translating information on forms to a customer and
15		translating the customer's answers to questions posed on
16		those forms.
17		(4) Securing for the customer supporting documents
18		currently in existence, such as birth and marriage
19		certificates, which may be needed to be submitted with
20		government agency forms.
21		(5) Translating documents from a foreign language into
22		English.
23		(6) Notarizing signatures on government agency forms,
24		if the person performing the service is a notary public of
25		the State of Illinois.
26		(7) Making referrals, without fee, to attorneys who

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1		could undertake legal representation for a person in an
2		immigration matter.
3		(8) Preparing or arranging for the preparation of
4		photographs and fingerprints.
5		(9) Arranging for the performance of medical testing
6		(including X-rays and AIDS tests) and the obtaining of
7		reports of such test results.
8		(10) Conducting English language and civics courses.
9		(11) Other services that the Attorney General
10		determines by rule may be appropriately performed by such
11		persons in light of the purposes of this Section.
12		Fees for a notary public, agency, or any other person who
13		is not an attorney or an accredited representative filling out
14		immigration forms shall be limited to the maximum fees set
15		forth in subsections (a) and (b) of Section 3-104 of the
16		Illinois Notary Public Act (5 ILCS 312/3-104). The maximum fee
17		schedule set forth in subsections (a) and (b) of Section 3-104
18		of the Illinois Notary Public Act shall apply to any person
19		that provides or offers to provide immigration assistance
20		service performing the services described therein. The
21		Attorney General may promulgate rules establishing maximum
22		fees that may be charged for any services not described in that
23		subsection. The maximum fees must be reasonable in light of
24		the costs of providing those services and the degree of
25		professional skill required to provide the services.
26		No person subject to this Act shall charge fees directly

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1		or indirectly for referring an individual to an attorney or
2		for any immigration matter not authorized by this Article,
3		provided that a person may charge a fee for notarizing
4		documents as permitted by the Illinois Notary Public Act.
5		(c) Any person performing such services shall register
6		with the Illinois Attorney General and submit verification of
7		malpractice insurance or of a surety bond.
8		(d) Except as provided otherwise in this subsection,
9		before providing any assistance in an immigration matter a
10		person shall provide the customer with a written contract that
11		includes the following:
12		(1) An explanation of the services to be performed.
13		(2) Identification of all compensation and costs to be
14		charged to the customer for the services to be performed.
15		(3) A statement that documents submitted in support of
16		an application for nonimmigrant, immigrant, or
17		naturalization status may not be retained by the person
18		for any purpose, including payment of compensation or
19		costs.
20		This subsection does not apply to a not-for-profit
21		organization that provides advice or assistance in immigration
22		matters to clients without charge beyond a reasonable fee to
23		reimburse the organization's or clinic's reasonable costs
24		relating to providing immigration services to that client.
25		(e) Any person who provides or offers immigration
26		assistance service and is not exempted from this Section,

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1		shall post signs at his or her place of business, setting forth
2		information in English and in every other language in which
3		the person provides or offers to provide immigration
4		assistance service. Each language shall be on a separate sign.
5		Signs shall be posted in a location where the signs will be
6		visible to customers. Each sign shall be at least 11 inches by
7		17 inches, and shall contain the following:
8		(1) The statement "I AM NOT AN ATTORNEY LICENSED TO
9		PRACTICE LAW AND MAY NOT GIVE LEGAL ADVICE OR ACCEPT FEES
10		FOR LEGAL ADVICE.".
11		(2) The statement "I AM NOT ACCREDITED TO REPRESENT
12		YOU BEFORE THE UNITED STATES IMMIGRATION AND
13		NATURALIZATION SERVICE AND THE IMMIGRATION BOARD OF
14		APPEALS.".
15		(3) The fee schedule.
16		(4) The statement that "You may cancel any contract
17		within 3 working days and get your money back for services
18		not performed.".
19		(5) Additional information the Attorney General may
20		require by rule.
21		Every person engaged in immigration assistance service who
22		is not an attorney who advertises immigration assistance
23		service in a language other than English, whether by radio,
24		television, signs, pamphlets, newspapers, or other written
25		communication, with the exception of a single desk plaque,
26		shall include in the document, advertisement, stationery,

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1		letterhead, business card, or other comparable written
2		material the following notice in English and the language in
3		which the written communication appears. This notice shall be
4		of a conspicuous size, if in writing, and shall state: "I AM
5		NOT AN ATTORNEY LICENSED TO PRACTICE LAW IN ILLINOIS AND MAY
6		NOT GIVE LEGAL ADVICE OR ACCEPT FEES FOR LEGAL ADVICE.". If
7		such advertisement is by radio or television, the statement
8		may be modified but must include substantially the same
9		message.
10		Any person who provides or offers immigration assistance
11		service and is not exempted from this Section shall not, in any
12		document, advertisement, stationery, letterhead, business
13		card, or other comparable written material, literally
14		translate from English into another language terms or titles
15		including, but not limited to, notary public, notary,
16		licensed, attorney, lawyer, or any other term that implies the
17		person is an attorney. To illustrate, the words "notario" and
18		"poder notarial" are prohibited under this provision.
19		If not subject to penalties under subsection (a) of
20		Section 3-103 of the Illinois Notary Public Act (5 ILCS
21		312/3-103), violations of this subsection shall result in a
22		fine of $1,000. Violations shall not preempt or preclude
23		additional appropriate civil or criminal penalties.
24		(f) The written contract shall be in both English and in
25		the language of the customer.
26		(g) A copy of the contract shall be provided to the

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1		customer upon the customer's execution of the contract.
2		(h) A customer has the right to rescind a contract within
3		72 hours after his or her signing of the contract.
4		(i) Any documents identified in paragraph (3) of
5		subsection (c) shall be returned upon demand of the customer.
6		(j) No person engaged in providing immigration services
7		who is not exempted under this Section shall do any of the
8		following:
9		(1) Make any statement that the person can or will
10		obtain special favors from or has special influence with
11		the United States Immigration and Naturalization Service
12		or any other government agency.
13		(2) Retain any compensation for service not performed.
14		(2.5) Accept payment in exchange for providing legal
15		advice or any other assistance that requires legal
16		analysis, legal judgment, or interpretation of the law.
17		(3) Refuse to return documents supplied by, prepared
18		on behalf of, or paid for by the customer upon the request
19		of the customer. These documents must be returned upon
20		request even if there is a fee dispute between the
21		immigration assistant and the customer.
22		(4) Represent or advertise, in connection with the
23		provision of assistance in immigration matters, other
24		titles of credentials, including but not limited to
25		"notary public" or "immigration consultant," that could
26		cause a customer to believe that the person possesses

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1		special professional skills or is authorized to provide
2		advice on an immigration matter; provided that a notary
3		public appointed by the Illinois Secretary of State may
4		use the term "notary public" if the use is accompanied by
5		the statement that the person is not an attorney; the term
6		"notary public" may not be translated to another language;
7		for example "notario" is prohibited.
8		(5) Provide legal advice, recommend a specific course
9		of legal action, or provide any other assistance that
10		requires legal analysis, legal judgment, or interpretation
11		of the law.
12		(6) Make any misrepresentation of false statement,
13		directly or indirectly, to influence, persuade, or induce
14		patronage.
15		(k) (Blank).
16		(l) (Blank).
17		(m) Any person who violates any provision of this Section,
18		or the rules and regulations issued under this Section, shall
19		be guilty of a Class A misdemeanor for a first offense and a
20		Class 3 felony for a second or subsequent offense committed
21		within 5 years of a previous conviction for the same offense.
22		Upon his own information or upon the complaint of any
23		person, the Attorney General or any State's Attorney, or a
24		municipality with a population of more than 1,000,000, may
25		maintain an action for injunctive relief and also seek a civil
26		penalty not exceeding $50,000 in the circuit court against any

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1		person who violates any provision of this Section. These
2		remedies are in addition to, and not in substitution for,
3		other available remedies.
4		If the Attorney General or any State's Attorney or a
5		municipality with a population of more than 1,000,000 fails to
6		bring an action as provided under this Section any person may
7		file a civil action to enforce the provisions of this Article
8		and maintain an action for injunctive relief, for compensatory
9		damages to recover prohibited fees, or for such additional
10		relief as may be appropriate to deter, prevent, or compensate
11		for the violation. In order to deter violations of this
12		Section, courts shall not require a showing of the traditional
13		elements for equitable relief. A prevailing plaintiff may be
14		awarded 3 times the prohibited fees or a minimum of $1,000 in
15		punitive damages, attorney's fees, and costs of bringing an
16		action under this Section. It is the express intention of the
17		General Assembly that remedies for violation of this Section
18		be cumulative.
19		(n) No unit of local government, including any home rule
20		unit, shall have the authority to regulate immigration
21		assistance services unless such regulations are at least as
22		stringent as those contained in Public Act 87-1211. It is
23		declared to be the law of this State, pursuant to paragraph (i)
24		of Section 6 of Article VII of the Illinois Constitution of
25		1970, that Public Act 87-1211 is a limitation on the authority
26		of a home rule unit to exercise powers concurrently with the

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1		State. The limitations of this Section do not apply to a home
2		rule unit that has, prior to January 1, 1993 (the effective
3		date of Public Act 87-1211), adopted an ordinance regulating
4		immigration assistance services.
5		(o) This Section is severable under Section 1.31 of the
6		Statute on Statutes.
7		(p) The Attorney General shall issue rules not
8		inconsistent with this Section for the implementation,
9		administration, and enforcement of this Section. The rules may
10		provide for the following:
11		(1) The content, print size, and print style of the
12		signs required under subsection (e). Print sizes and
13		styles may vary from language to language.
14		(2) Standard forms for use in the administration of
15		this Section.
16		(3) Any additional requirements deemed necessary.
17		(Source: P.A. 99-679, eff. 1-1-17; 100-863, eff. 8-14-18.)
18		Section 210. The Workers' Compensation Act is amended by
19		changing Sections 1 and 7 as follows:
20		(820 ILCS 305/1) (from Ch. 48, par. 138.1)
21		Sec. 1. This Act may be cited as the Workers' Compensation
22		Act.
23		(a) The term "employer" as used in this Act means:
24		1. The State and each county, city, town, township,

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1		incorporated village, school district, body politic, or
2		municipal corporation therein.
3		2. Every person, firm, public or private corporation,
4		including hospitals, public service, eleemosynary, religious
5		or charitable corporations or associations who has any person
6		in service or under any contract for hire, express or implied,
7		oral or written, and who is engaged in any of the enterprises
8		or businesses enumerated in Section 3 of this Act, or who at or
9		prior to the time of the accident to the employee for which
10		compensation under this Act may be claimed, has in the manner
11		provided in this Act elected to become subject to the
12		provisions of this Act, and who has not, prior to such
13		accident, effected a withdrawal of such election in the manner
14		provided in this Act.
15		3. Any one engaging in any business or enterprise referred
16		to in subsections 1 and 2 of Section 3 of this Act who
17		undertakes to do any work enumerated therein, is liable to pay
18		compensation to his own immediate employees in accordance with
19		the provisions of this Act, and in addition thereto if he
20		directly or indirectly engages any contractor whether
21		principal or sub-contractor to do any such work, he is liable
22		to pay compensation to the employees of any such contractor or
23		sub-contractor unless such contractor or sub-contractor has
24		insured, in any company or association authorized under the
25		laws of this State to insure the liability to pay compensation
26		under this Act, or guaranteed his liability to pay such

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1		compensation. With respect to any time limitation on the
2		filing of claims provided by this Act, the timely filing of a
3		claim against a contractor or subcontractor, as the case may
4		be, shall be deemed to be a timely filing with respect to all
5		persons upon whom liability is imposed by this paragraph.
6		In the event any such person pays compensation under this
7		subsection he may recover the amount thereof from the
8		contractor or sub-contractor, if any, and in the event the
9		contractor pays compensation under this subsection he may
10		recover the amount thereof from the sub-contractor, if any.
11		This subsection does not apply in any case where the
12		accident occurs elsewhere than on, in or about the immediate
13		premises on which the principal has contracted that the work
14		be done.
15		4. Where an employer operating under and subject to the
16		provisions of this Act loans an employee to another such
17		employer and such loaned employee sustains a compensable
18		accidental injury in the employment of such borrowing employer
19		and where such borrowing employer does not provide or pay the
20		benefits or payments due such injured employee, such loaning
21		employer is liable to provide or pay all benefits or payments
22		due such employee under this Act and as to such employee the
23		liability of such loaning and borrowing employers is joint and
24		several, provided that such loaning employer is in the absence
25		of agreement to the contrary entitled to receive from such
26		borrowing employer full reimbursement for all sums paid or

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1		incurred pursuant to this paragraph together with reasonable
2		attorneys' fees and expenses in any hearings before the
3		Illinois Workers' Compensation Commission or in any action to
4		secure such reimbursement. Where any benefit is provided or
5		paid by such loaning employer the employee has the duty of
6		rendering reasonable cooperation in any hearings, trials or
7		proceedings in the case, including such proceedings for
8		reimbursement.
9		Where an employee files an Application for Adjustment of
10		Claim with the Illinois Workers' Compensation Commission
11		alleging that his claim is covered by the provisions of the
12		preceding paragraph, and joining both the alleged loaning and
13		borrowing employers, they and each of them, upon written
14		demand by the employee and within 7 days after receipt of such
15		demand, shall have the duty of filing with the Illinois
16		Workers' Compensation Commission a written admission or denial
17		of the allegation that the claim is covered by the provisions
18		of the preceding paragraph and in default of such filing or if
19		any such denial be ultimately determined not to have been bona
20		fide then the provisions of Paragraph K of Section 19 of this
21		Act shall apply.
22		An employer whose business or enterprise or a substantial
23		part thereof consists of hiring, procuring or furnishing
24		employees to or for other employers operating under and
25		subject to the provisions of this Act for the performance of
26		the work of such other employers and who pays such employees

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1		their salary or wages notwithstanding that they are doing the
2		work of such other employers shall be deemed a loaning
3		employer within the meaning and provisions of this Section.
4		(b) The term "employee" as used in this Act means:
5		1. Every person in the service of the State, including
6		members of the General Assembly, members of the Commerce
7		Commission, members of the Illinois Workers' Compensation
8		Commission, and all persons in the service of the University
9		of Illinois, county, including deputy sheriffs and assistant
10		state's attorneys, city, town, township, incorporated village
11		or school district, body politic, or municipal corporation
12		therein, whether by election, under appointment or contract of
13		hire, express or implied, oral or written, including all
14		members of the Illinois National Guard while on active duty in
15		the service of the State, and all probation personnel of the
16		Juvenile Court appointed pursuant to Article VI of the
17		Juvenile Court Act of 1987, and including any official of the
18		State, any county, city, town, township, incorporated village,
19		school district, body politic or municipal corporation therein
20		except any duly appointed member of a police department in any
21		city whose population exceeds 500,000 according to the last
22		Federal or State census, and except any member of a fire
23		insurance patrol maintained by a board of underwriters in this
24		State. A duly appointed member of a fire department in any
25		city, the population of which exceeds 500,000 according to the
26		last federal or State census, is an employee under this Act

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1		only with respect to claims brought under paragraph (c) of
2		Section 8.
3		One employed by a contractor who has contracted with the
4		State, or a county, city, town, township, incorporated
5		village, school district, body politic or municipal
6		corporation therein, through its representatives, is not
7		considered as an employee of the State, county, city, town,
8		township, incorporated village, school district, body politic
9		or municipal corporation which made the contract.
10		2. Every person in the service of another under any
11		contract of hire, express or implied, oral or written,
12		including persons whose employment is outside of the State of
13		Illinois where the contract of hire is made within the State of
14		Illinois, persons whose employment results in fatal or
15		non-fatal injuries within the State of Illinois where the
16		contract of hire is made outside of the State of Illinois, and
17		persons whose employment is principally localized within the
18		State of Illinois, regardless of the place of the accident or
19		the place where the contract of hire was made, and including
20		noncitizens aliens, and minors who, for the purpose of this
21		Act are considered the same and have the same power to
22		contract, receive payments and give quittances therefor, as
23		adult employees.
24		3. Every sole proprietor and every partner of a business
25		may elect to be covered by this Act.
26		An employee or his dependents under this Act who shall

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1		have a cause of action by reason of any injury, disablement or
2		death arising out of and in the course of his employment may
3		elect to pursue his remedy in the State where injured or
4		disabled, or in the State where the contract of hire is made,
5		or in the State where the employment is principally localized.
6		However, any employer may elect to provide and pay
7		compensation to any employee other than those engaged in the
8		usual course of the trade, business, profession or occupation
9		of the employer by complying with Sections 2 and 4 of this Act.
10		Employees are not included within the provisions of this Act
11		when excluded by the laws of the United States relating to
12		liability of employers to their employees for personal
13		injuries where such laws are held to be exclusive.
14		The term "employee" does not include persons performing
15		services as real estate broker, broker-salesman, or salesman
16		when such persons are paid by commission only.
17		(c) "Commission" means the Industrial Commission created
18		by Section 5 of "The Civil Administrative Code of Illinois",
19		approved March 7, 1917, as amended, or the Illinois Workers'
20		Compensation Commission created by Section 13 of this Act.
21		(d) To obtain compensation under this Act, an employee
22		bears the burden of showing, by a preponderance of the
23		evidence, that he or she has sustained accidental injuries
24		arising out of and in the course of the employment.
25		(Source: P.A. 97-18, eff. 6-28-11; 97-268, eff. 8-8-11;
26		97-813, eff. 7-13-12.)

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1		(820 ILCS 305/7) (from Ch. 48, par. 138.7)
2		Sec. 7. The amount of compensation which shall be paid for
3		an accidental injury to the employee resulting in death is:
4		(a) If the employee leaves surviving a widow, widower,
5		child or children, the applicable weekly compensation rate
6		computed in accordance with subparagraph 2 of paragraph (b) of
7		Section 8, shall be payable during the life of the widow or
8		widower and if any surviving child or children shall not be
9		physically or mentally incapacitated then until the death of
10		the widow or widower or until the youngest child shall reach
11		the age of 18, whichever shall come later; provided that if
12		such child or children shall be enrolled as a full time student
13		in any accredited educational institution, the payments shall
14		continue until such child has attained the age of 25. In the
15		event any surviving child or children shall be physically or
16		mentally incapacitated, the payments shall continue for the
17		duration of such incapacity.
18		The term "child" means a child whom the deceased employee
19		left surviving, including a posthumous child, a child legally
20		adopted, a child whom the deceased employee was legally
21		obligated to support or a child to whom the deceased employee
22		stood in loco parentis. The term "children" means the plural
23		of "child".
24		The term "physically or mentally incapacitated child or
25		children" means a child or children incapable of engaging in

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1		regular and substantial gainful employment.
2		In the event of the remarriage of a widow or widower, where
3		the decedent did not leave surviving any child or children
4		who, at the time of such remarriage, are entitled to
5		compensation benefits under this Act, the surviving spouse
6		shall be paid a lump sum equal to 2 years compensation benefits
7		and all further rights of such widow or widower shall be
8		extinguished.
9		If the employee leaves surviving any child or children
10		under 18 years of age who at the time of death shall be
11		entitled to compensation under this paragraph (a) of this
12		Section, the weekly compensation payments herein provided for
13		such child or children shall in any event continue for a period
14		of not less than 6 years.
15		Any beneficiary entitled to compensation under this
16		paragraph (a) of this Section shall receive from the special
17		fund provided in paragraph (f) of this Section, in addition to
18		the compensation herein provided, supplemental benefits in
19		accordance with paragraph (g) of Section 8.
20		(b) If no compensation is payable under paragraph (a) of
21		this Section and the employee leaves surviving a parent or
22		parents who at the time of the accident were totally dependent
23		upon the earnings of the employee then weekly payments equal
24		to the compensation rate payable in the case where the
25		employee leaves surviving a widow or widower, shall be paid to
26		such parent or parents for the duration of their lives, and in

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1		the event of the death of either, for the life of the survivor.
2		(c) If no compensation is payable under paragraphs (a) or
3		(b) of this Section and the employee leaves surviving any
4		child or children who are not entitled to compensation under
5		the foregoing paragraph (a) but who at the time of the accident
6		were nevertheless in any manner dependent upon the earnings of
7		the employee, or leaves surviving a parent or parents who at
8		the time of the accident were partially dependent upon the
9		earnings of the employee, then there shall be paid to such
10		dependent or dependents for a period of 8 years weekly
11		compensation payments at such proportion of the applicable
12		rate if the employee had left surviving a widow or widower as
13		such dependency bears to total dependency. In the event of the
14		death of any such beneficiary the share of such beneficiary
15		shall be divided equally among the surviving beneficiaries and
16		in the event of the death of the last such beneficiary all the
17		rights under this paragraph shall be extinguished.
18		(d) If no compensation is payable under paragraphs (a),
19		(b) or (c) of this Section and the employee leaves surviving
20		any grandparent, grandparents, grandchild or grandchildren or
21		collateral heirs dependent upon the employee's earnings to the
22		extent of 50% or more of total dependency, then there shall be
23		paid to such dependent or dependents for a period of 5 years
24		weekly compensation payments at such proportion of the
25		applicable rate if the employee had left surviving a widow or
26		widower as such dependency bears to total dependency. In the

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1		event of the death of any such beneficiary the share of such
2		beneficiary shall be divided equally among the surviving
3		beneficiaries and in the event of the death of the last such
4		beneficiary all rights hereunder shall be extinguished.
5		(e) The compensation to be paid for accidental injury
6		which results in death, as provided in this Section, shall be
7		paid to the persons who form the basis for determining the
8		amount of compensation to be paid by the employer, the
9		respective shares to be in the proportion of their respective
10		dependency at the time of the accident on the earnings of the
11		deceased. The Commission or an Arbitrator thereof may, in its
12		or his discretion, order or award the payment to the parent or
13		grandparent of a child for the latter's support the amount of
14		compensation which but for such order or award would have been
15		paid to such child as its share of the compensation payable,
16		which order or award may be modified from time to time by the
17		Commission in its discretion with respect to the person to
18		whom shall be paid the amount of the order or award remaining
19		unpaid at the time of the modification.
20		The payments of compensation by the employer in accordance
21		with the order or award of the Commission discharges such
22		employer from all further obligation as to such compensation.
23		(f) The sum of $8,000 for burial expenses shall be paid by
24		the employer to the widow or widower, other dependent, next of
25		kin or to the person or persons incurring the expense of
26		burial.

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1		In the event the employer failed to provide necessary
2		first aid, medical, surgical or hospital service, he shall pay
3		the cost thereof to the person or persons entitled to
4		compensation under paragraphs (a), (b), (c) or (d) of this
5		Section, or to the person or persons incurring the obligation
6		therefore, or providing the same.
7		On January 15 and July 15, 1981, and on January 15 and July
8		15 of each year thereafter the employer shall within 60 days
9		pay a sum equal to 1/8 of 1% of all compensation payments made
10		by him after July 1, 1980, either under this Act or the
11		Workers' Occupational Diseases Act, whether by lump sum
12		settlement or weekly compensation payments, but not including
13		hospital, surgical or rehabilitation payments, made during the
14		first 6 months and during the second 6 months respectively of
15		the fiscal year next preceding the date of the payments, into a
16		special fund which shall be designated the "Second Injury
17		Fund", of which the State Treasurer is ex-officio custodian,
18		such special fund to be held and disbursed for the purposes
19		hereinafter stated in paragraphs (f) and (g) of Section 8,
20		either upon the order of the Commission or of a competent
21		court. Said special fund shall be deposited the same as are
22		State funds and any interest accruing thereon shall be added
23		thereto every 6 months. It is subject to audit the same as
24		State funds and accounts and is protected by the General bond
25		given by the State Treasurer. It is considered always
26		appropriated for the purposes of disbursements as provided in

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1		Section 8, paragraph (f), of this Act, and shall be paid out
2		and disbursed as therein provided and shall not at any time be
3		appropriated or diverted to any other use or purpose.
4		On January 15, 1991, the employer shall further pay a sum
5		equal to one half of 1% of all compensation payments made by
6		him from January 1, 1990 through June 30, 1990 either under
7		this Act or under the Workers' Occupational Diseases Act,
8		whether by lump sum settlement or weekly compensation
9		payments, but not including hospital, surgical or
10		rehabilitation payments, into an additional Special Fund which
11		shall be designated as the "Rate Adjustment Fund". On March
12		15, 1991, the employer shall pay into the Rate Adjustment Fund
13		a sum equal to one half of 1% of all such compensation payments
14		made from July 1, 1990 through December 31, 1990. Within 60
15		days after July 15, 1991, the employer shall pay into the Rate
16		Adjustment Fund a sum equal to one half of 1% of all such
17		compensation payments made from January 1, 1991 through June
18		30, 1991. Within 60 days after January 15 of 1992 and each
19		subsequent year through 1996, the employer shall pay into the
20		Rate Adjustment Fund a sum equal to one half of 1% of all such
21		compensation payments made in the last 6 months of the
22		preceding calendar year. Within 60 days after July 15 of 1992
23		and each subsequent year through 1995, the employer shall pay
24		into the Rate Adjustment Fund a sum equal to one half of 1% of
25		all such compensation payments made in the first 6 months of
26		the same calendar year. Within 60 days after January 15 of 1997

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1		and each subsequent year through 2005, the employer shall pay
2		into the Rate Adjustment Fund a sum equal to three-fourths of
3		1% of all such compensation payments made in the last 6 months
4		of the preceding calendar year. Within 60 days after July 15 of
5		1996 and each subsequent year through 2004, the employer shall
6		pay into the Rate Adjustment Fund a sum equal to three-fourths
7		of 1% of all such compensation payments made in the first 6
8		months of the same calendar year. Within 60 days after July 15
9		of 2005, the employer shall pay into the Rate Adjustment Fund a
10		sum equal to 1% of such compensation payments made in the first
11		6 months of the same calendar year. Within 60 days after
12		January 15 of 2006 and each subsequent year, the employer
13		shall pay into the Rate Adjustment Fund a sum equal to 1.25% of
14		such compensation payments made in the last 6 months of the
15		preceding calendar year. Within 60 days after July 15 of 2006
16		and each subsequent year, the employer shall pay into the Rate
17		Adjustment Fund a sum equal to 1.25% of such compensation
18		payments made in the first 6 months of the same calendar year.
19		The administrative costs of collecting assessments from
20		employers for the Rate Adjustment Fund shall be paid from the
21		Rate Adjustment Fund. The cost of an actuarial audit of the
22		Fund shall be paid from the Rate Adjustment Fund. The State
23		Treasurer is ex officio custodian of such Special Fund and the
24		same shall be held and disbursed for the purposes hereinafter
25		stated in paragraphs (f) and (g) of Section 8 upon the order of
26		the Commission or of a competent court. The Rate Adjustment

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1		Fund shall be deposited the same as are State funds and any
2		interest accruing thereon shall be added thereto every 6
3		months. It shall be subject to audit the same as State funds
4		and accounts and shall be protected by the general bond given
5		by the State Treasurer. It is considered always appropriated
6		for the purposes of disbursements as provided in paragraphs
7		(f) and (g) of Section 8 of this Act and shall be paid out and
8		disbursed as therein provided and shall not at any time be
9		appropriated or diverted to any other use or purpose. Within 5
10		days after the effective date of this amendatory Act of 1990,
11		the Comptroller and the State Treasurer shall transfer
12		$1,000,000 from the General Revenue Fund to the Rate
13		Adjustment Fund. By February 15, 1991, the Comptroller and the
14		State Treasurer shall transfer $1,000,000 from the Rate
15		Adjustment Fund to the General Revenue Fund. The Comptroller
16		and Treasurer are authorized to make transfers at the request
17		of the Chairman up to a total of $19,000,000 from the Second
18		Injury Fund, the General Revenue Fund, and the Workers'
19		Compensation Benefit Trust Fund to the Rate Adjustment Fund to
20		the extent that there is insufficient money in the Rate
21		Adjustment Fund to pay claims and obligations. Amounts may be
22		transferred from the General Revenue Fund only if the funds in
23		the Second Injury Fund or the Workers' Compensation Benefit
24		Trust Fund are insufficient to pay claims and obligations of
25		the Rate Adjustment Fund. All amounts transferred from the
26		Second Injury Fund, the General Revenue Fund, and the Workers'

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1		Compensation Benefit Trust Fund shall be repaid from the Rate
2		Adjustment Fund within 270 days of a transfer, together with
3		interest at the rate earned by moneys on deposit in the Fund or
4		Funds from which the moneys were transferred.
5		Upon a finding by the Commission, after reasonable notice
6		and hearing, that any employer has willfully and knowingly
7		failed to pay the proper amounts into the Second Injury Fund or
8		the Rate Adjustment Fund required by this Section or if such
9		payments are not made within the time periods prescribed by
10		this Section, the employer shall, in addition to such
11		payments, pay a penalty of 20% of the amount required to be
12		paid or $2,500, whichever is greater, for each year or part
13		thereof of such failure to pay. This penalty shall only apply
14		to obligations of an employer to the Second Injury Fund or the
15		Rate Adjustment Fund accruing after the effective date of this
16		amendatory Act of 1989. All or part of such a penalty may be
17		waived by the Commission for good cause shown.
18		Any obligations of an employer to the Second Injury Fund
19		and Rate Adjustment Fund accruing prior to the effective date
20		of this amendatory Act of 1989 shall be paid in full by such
21		employer within 5 years of the effective date of this
22		amendatory Act of 1989, with at least one-fifth of such
23		obligation to be paid during each year following the effective
24		date of this amendatory Act of 1989. If the Commission finds,
25		following reasonable notice and hearing, that an employer has
26		failed to make timely payment of any obligation accruing under

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1		the preceding sentence, the employer shall, in addition to all
2		other payments required by this Section, be liable for a
3		penalty equal to 20% of the overdue obligation or $2,500,
4		whichever is greater, for each year or part thereof that
5		obligation is overdue. All or part of such a penalty may be
6		waived by the Commission for good cause shown.
7		The Chairman of the Illinois Workers' Compensation
8		Commission shall, annually, furnish to the Director of the
9		Department of Insurance a list of the amounts paid into the
10		Second Injury Fund and the Rate Adjustment Fund by each
11		insurance company on behalf of their insured employers. The
12		Director shall verify to the Chairman that the amounts paid by
13		each insurance company are accurate as best as the Director
14		can determine from the records available to the Director. The
15		Chairman shall verify that the amounts paid by each
16		self-insurer are accurate as best as the Chairman can
17		determine from records available to the Chairman. The Chairman
18		may require each self-insurer to provide information
19		concerning the total compensation payments made upon which
20		contributions to the Second Injury Fund and the Rate
21		Adjustment Fund are predicated and any additional information
22		establishing that such payments have been made into these
23		funds. Any deficiencies in payments noted by the Director or
24		Chairman shall be subject to the penalty provisions of this
25		Act.
26		The State Treasurer, or his duly authorized

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1		representative, shall be named as a party to all proceedings
2		in all cases involving claim for the loss of, or the permanent
3		and complete loss of the use of one eye, one foot, one leg, one
4		arm or one hand.
5		The State Treasurer or his duly authorized agent shall
6		have the same rights as any other party to the proceeding,
7		including the right to petition for review of any award. The
8		reasonable expenses of litigation, such as medical
9		examinations, testimony, and transcript of evidence, incurred
10		by the State Treasurer or his duly authorized representative,
11		shall be borne by the Second Injury Fund.
12		If the award is not paid within 30 days after the date the
13		award has become final, the Commission shall proceed to take
14		judgment thereon in its own name as is provided for other
15		awards by paragraph (g) of Section 19 of this Act and take the
16		necessary steps to collect the award.
17		Any person, corporation or organization who has paid or
18		become liable for the payment of burial expenses of the
19		deceased employee may in his or its own name institute
20		proceedings before the Commission for the collection thereof.
21		For the purpose of administration, receipts and
22		disbursements, the Special Fund provided for in paragraph (f)
23		of this Section shall be administered jointly with the Special
24		Fund provided for in Section 7, paragraph (f) of the Workers'
25		Occupational Diseases Act.
26		(g) All compensation, except for burial expenses provided

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1		in this Section to be paid in case accident results in death,
2		shall be paid in installments equal to the percentage of the
3		average earnings as provided for in Section 8, paragraph (b)
4		of this Act, at the same intervals at which the wages or
5		earnings of the employees were paid. If this is not feasible,
6		then the installments shall be paid weekly. Such compensation
7		may be paid in a lump sum upon petition as provided in Section
8		9 of this Act. However, in addition to the benefits provided by
9		Section 9 of this Act where compensation for death is payable
10		to the deceased's widow, widower or to the deceased's widow,
11		widower and one or more children, and where a partial lump sum
12		is applied for by such beneficiary or beneficiaries within 18
13		months after the deceased's death, the Commission may, in its
14		discretion, grant a partial lump sum of not to exceed 100 weeks
15		of the compensation capitalized at their present value upon
16		the basis of interest calculated at 3% per annum with annual
17		rests, upon a showing that such partial lump sum is for the
18		best interest of such beneficiary or beneficiaries.
19		(h) In case the injured employee is under 16 years of age
20		at the time of the accident and is illegally employed, the
21		amount of compensation payable under paragraphs (a), (b), (c),
22		(d) and (f) of this Section shall be increased 50%.
23		Nothing herein contained repeals or amends the provisions
24		of the Child Labor Law relating to the employment of minors
25		under the age of 16 years.
26		However, where an employer has on file an employment

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1		certificate issued pursuant to the Child Labor Law or work
2		permit issued pursuant to the Federal Fair Labor Standards
3		Act, as amended, or a birth certificate properly and duly
4		issued, such certificate, permit or birth certificate is
5		conclusive evidence as to the age of the injured minor
6		employee for the purposes of this Section only.
7		(i) Whenever the dependents of a deceased employee are
8		noncitizens aliens not residing in the United States, Mexico
9		or Canada, the amount of compensation payable is limited to
10		the beneficiaries described in paragraphs (a), (b) and (c) of
11		this Section and is 50% of the compensation provided in
12		paragraphs (a), (b) and (c) of this Section, except as
13		otherwise provided by treaty.
14		In a case where any of the persons who would be entitled to
15		compensation is living at any place outside of the United
16		States, then payment shall be made to the personal
17		representative of the deceased employee. The distribution by
18		such personal representative to the persons entitled shall be
19		made to such persons and in such manner as the Commission
20		orders.
21		(Source: P.A. 93-721, eff. 1-1-05; 94-277, eff. 7-20-05;
22		94-695, eff. 11-16-05.)
23		Section 215. The Workers' Occupational Diseases Act is
24		amended by changing Section 1 as follows:

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1		(820 ILCS 310/1) (from Ch. 48, par. 172.36)
2		Sec. 1. This Act shall be known and may be cited as the
3		"Workers' Occupational Diseases Act".
4		(a) The term "employer" as used in this Act shall be
5		construed to be:
6		1. The State and each county, city, town, township,
7		incorporated village, school district, body politic, or
8		municipal corporation therein.
9		2. Every person, firm, public or private corporation,
10		including hospitals, public service, eleemosynary,
11		religious or charitable corporations or associations, who
12		has any person in service or under any contract for hire,
13		express or implied, oral or written.
14		3. Where an employer operating under and subject to
15		the provisions of this Act loans an employee to another
16		such employer and such loaned employee sustains a
17		compensable occupational disease in the employment of such
18		borrowing employer and where such borrowing employer does
19		not provide or pay the benefits or payments due such
20		employee, such loaning employer shall be liable to provide
21		or pay all benefits or payments due such employee under
22		this Act and as to such employee the liability of such
23		loaning and borrowing employers shall be joint and
24		several, provided that such loaning employer shall in the
25		absence of agreement to the contrary be entitled to
26		receive from such borrowing employer full reimbursement

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1		for all sums paid or incurred pursuant to this paragraph
2		together with reasonable attorneys' fees and expenses in
3		any hearings before the Illinois Workers' Compensation
4		Commission or in any action to secure such reimbursement.
5		Where any benefit is provided or paid by such loaning
6		employer, the employee shall have the duty of rendering
7		reasonable co-operation in any hearings, trials or
8		proceedings in the case, including such proceedings for
9		reimbursement.
10		Where an employee files an Application for Adjustment
11		of Claim with the Illinois Workers' Compensation
12		Commission alleging that his or her claim is covered by
13		the provisions of the preceding paragraph, and joining
14		both the alleged loaning and borrowing employers, they and
15		each of them, upon written demand by the employee and
16		within 7 days after receipt of such demand, shall have the
17		duty of filing with the Illinois Workers' Compensation
18		Commission a written admission or denial of the allegation
19		that the claim is covered by the provisions of the
20		preceding paragraph and in default of such filing or if
21		any such denial be ultimately determined not to have been
22		bona fide then the provisions of Paragraph K of Section 19
23		of this Act shall apply.
24		An employer whose business or enterprise or a
25		substantial part thereof consists of hiring, procuring or
26		furnishing employees to or for other employers operating

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1		under and subject to the provisions of this Act for the
2		performance of the work of such other employers and who
3		pays such employees their salary or wage notwithstanding
4		that they are doing the work of such other employers shall
5		be deemed a loaning employer within the meaning and
6		provisions of this Section.
7		(b) The term "employee" as used in this Act, shall be
8		construed to mean:
9		1. Every person in the service of the State, county,
10		city, town, township, incorporated village or school
11		district, body politic or municipal corporation therein,
12		whether by election, appointment or contract of hire,
13		express or implied, oral or written, including any
14		official of the State, or of any county, city, town,
15		township, incorporated village, school district, body
16		politic or municipal corporation therein and except any
17		duly appointed member of the fire department in any city
18		whose population exceeds 500,000 according to the last
19		Federal or State census, and except any member of a fire
20		insurance patrol maintained by a board of underwriters in
21		this State. One employed by a contractor who has
22		contracted with the State, or a county, city, town,
23		township, incorporated village, school district, body
24		politic or municipal corporation therein, through its
25		representatives, shall not be considered as an employee of
26		the State, county, city, town, township, incorporated

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1		village, school district, body politic or municipal
2		corporation which made the contract.
3		2. Every person in the service of another under any
4		contract of hire, express or implied, oral or written, who
5		contracts an occupational disease while working in the
6		State of Illinois, or who contracts an occupational
7		disease while working outside of the State of Illinois but
8		where the contract of hire is made within the State of
9		Illinois, and any person whose employment is principally
10		localized within the State of Illinois, regardless of the
11		place where the disease was contracted or place where the
12		contract of hire was made, including noncitizens aliens,
13		and minors who, for the purpose of this Act, except
14		Section 3 hereof, shall be considered the same and have
15		the same power to contract, receive payments and give
16		quittances therefor, as adult employees. An employee or
17		his or her dependents under this Act who shall have a cause
18		of action by reason of an occupational disease,
19		disablement or death arising out of and in the course of
20		his or her employment may elect or pursue his or her remedy
21		in the State where the disease was contracted, or in the
22		State where the contract of hire is made, or in the State
23		where the employment is principally localized.
24		(c) "Commission" means the Illinois Workers' Compensation
25		Commission created by the Workers' Compensation Act, approved
26		July 9, 1951, as amended.

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1		(d) In this Act the term "Occupational Disease" means a
2		disease arising out of and in the course of the employment or
3		which has become aggravated and rendered disabling as a result
4		of the exposure of the employment. Such aggravation shall
5		arise out of a risk peculiar to or increased by the employment
6		and not common to the general public.
7		A disease shall be deemed to arise out of the employment if
8		there is apparent to the rational mind, upon consideration of
9		all the circumstances, a causal connection between the
10		conditions under which the work is performed and the
11		occupational disease. The disease need not to have been
12		foreseen or expected but after its contraction it must appear
13		to have had its origin or aggravation in a risk connected with
14		the employment and to have flowed from that source as a
15		rational consequence.
16		An employee shall be conclusively deemed to have been
17		exposed to the hazards of an occupational disease when, for
18		any length of time however short, he or she is employed in an
19		occupation or process in which the hazard of the disease
20		exists; provided however, that in a claim of exposure to
21		atomic radiation, the fact of such exposure must be verified
22		by the records of the central registry of radiation exposure
23		maintained by the Department of Public Health or by some other
24		recognized governmental agency maintaining records of such
25		exposures whenever and to the extent that the records are on
26		file with the Department of Public Health or the agency.

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1		Any injury to or disease or death of an employee arising
2		from the administration of a vaccine, including without
3		limitation smallpox vaccine, to prepare for, or as a response
4		to, a threatened or potential bioterrorist incident to the
5		employee as part of a voluntary inoculation program in
6		connection with the person's employment or in connection with
7		any governmental program or recommendation for the inoculation
8		of workers in the employee's occupation, geographical area, or
9		other category that includes the employee is deemed to arise
10		out of and in the course of the employment for all purposes
11		under this Act. This paragraph added by Public Act 93-829 is
12		declarative of existing law and is not a new enactment.
13		The employer liable for the compensation in this Act
14		provided shall be the employer in whose employment the
15		employee was last exposed to the hazard of the occupational
16		disease claimed upon regardless of the length of time of such
17		last exposure, except, in cases of silicosis or asbestosis,
18		the only employer liable shall be the last employer in whose
19		employment the employee was last exposed during a period of 60
20		days or more after the effective date of this Act, to the
21		hazard of such occupational disease, and, in such cases, an
22		exposure during a period of less than 60 days, after the
23		effective date of this Act, shall not be deemed a last
24		exposure. If a miner who is suffering or suffered from
25		pneumoconiosis was employed for 10 years or more in one or more
26		coal mines there shall, effective July 1, 1973 be a rebuttable

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1		presumption that his or her pneumoconiosis arose out of such
2		employment.
3		If a deceased miner was employed for 10 years or more in
4		one or more coal mines and died from a respirable disease there
5		shall, effective July 1, 1973, be a rebuttable presumption
6		that his or her death was due to pneumoconiosis.
7		Any condition or impairment of health of an employee
8		employed as a firefighter, emergency medical technician (EMT),
9		emergency medical technician-intermediate (EMT-I), advanced
10		emergency medical technician (A-EMT), or paramedic which
11		results directly or indirectly from any bloodborne pathogen,
12		lung or respiratory disease or condition, heart or vascular
13		disease or condition, hypertension, tuberculosis, or cancer
14		resulting in any disability (temporary, permanent, total, or
15		partial) to the employee shall be rebuttably presumed to arise
16		out of and in the course of the employee's firefighting, EMT,
17		EMT-I, A-EMT, or paramedic employment and, further, shall be
18		rebuttably presumed to be causally connected to the hazards or
19		exposures of the employment. This presumption shall also apply
20		to any hernia or hearing loss suffered by an employee employed
21		as a firefighter, EMT, EMT-I, A-EMT, or paramedic. However,
22		this presumption shall not apply to any employee who has been
23		employed as a firefighter, EMT, EMT-I, A-EMT, or paramedic for
24		less than 5 years at the time he or she files an Application
25		for Adjustment of Claim concerning this condition or
26		impairment with the Illinois Workers' Compensation Commission.

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1		The rebuttable presumption established under this subsection,
2		however, does not apply to an emergency medical technician
3		(EMT), emergency medical technician-intermediate (EMT-I),
4		advanced emergency medical technician (A-EMT), or paramedic
5		employed by a private employer if the employee spends the
6		preponderance of his or her work time for that employer
7		engaged in medical transfers between medical care facilities
8		or non-emergency medical transfers to or from medical care
9		facilities. The changes made to this subsection by this
10		amendatory Act of the 98th General Assembly shall be narrowly
11		construed. The Finding and Decision of the Illinois Workers'
12		Compensation Commission under only the rebuttable presumption
13		provision of this paragraph shall not be admissible or be
14		deemed res judicata in any disability claim under the Illinois
15		Pension Code arising out of the same medical condition;
16		however, this sentence makes no change to the law set forth in
17		Krohe v. City of Bloomington, 204 Ill.2d 392.
18		The insurance carrier liable shall be the carrier whose
19		policy was in effect covering the employer liable on the last
20		day of the exposure rendering such employer liable in
21		accordance with the provisions of this Act.
22		(e) "Disablement" means an impairment or partial
23		impairment, temporary or permanent, in the function of the
24		body or any of the members of the body, or the event of
25		becoming disabled from earning full wages at the work in which
26		the employee was engaged when last exposed to the hazards of

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1		the occupational disease by the employer from whom he or she
2		claims compensation, or equal wages in other suitable
3		employment; and "disability" means the state of being so
4		incapacitated.
5		(f) No compensation shall be payable for or on account of
6		any occupational disease unless disablement, as herein
7		defined, occurs within two years after the last day of the last
8		exposure to the hazards of the disease, except in cases of
9		occupational disease caused by berylliosis or by the
10		inhalation of silica dust or asbestos dust and, in such cases,
11		within 3 years after the last day of the last exposure to the
12		hazards of such disease and except in the case of occupational
13		disease caused by exposure to radiological materials or
14		equipment, and in such case, within 25 years after the last day
15		of last exposure to the hazards of such disease.
16		(g)(1) In any proceeding before the Commission in which
17		the employee is a COVID-19 first responder or front-line
18		worker as defined in this subsection, if the employee's injury
19		or occupational disease resulted from exposure to and
20		contraction of COVID-19, the exposure and contraction shall be
21		rebuttably presumed to have arisen out of and in the course of
22		the employee's first responder or front-line worker employment
23		and the injury or occupational disease shall be rebuttably
24		presumed to be causally connected to the hazards or exposures
25		of the employee's first responder or front-line worker
26		employment.

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1		(2) The term "COVID-19 first responder or front-line
2		worker" means: all individuals employed as police, fire
3		personnel, emergency medical technicians, or paramedics; all
4		individuals employed and considered as first responders; all
5		workers for health care providers, including nursing homes and
6		rehabilitation facilities and home care workers; corrections
7		officers; and any individuals employed by essential businesses
8		and operations as defined in Executive Order 2020-10 dated
9		March 20, 2020, as long as individuals employed by essential
10		businesses and operations are required by their employment to
11		encounter members of the general public or to work in
12		employment locations of more than 15 employees. For purposes
13		of this subsection only, an employee's home or place of
14		residence is not a place of employment, except for home care
15		workers.
16		(3) The presumption created in this subsection may be
17		rebutted by evidence, including, but not limited to, the
18		following:
19		(A) the employee was working from his or her home, on
20		leave from his or her employment, or some combination
21		thereof, for a period of 14 or more consecutive days
22		immediately prior to the employee's injury, occupational
23		disease, or period of incapacity resulted from exposure to
24		COVID-19; or
25		(B) the employer was engaging in and applying to the
26		fullest extent possible or enforcing to the best of its

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1		ability industry-specific workplace sanitation, social
2		distancing, and health and safety practices based on
3		updated guidance issued by the Centers for Disease Control
4		and Prevention or Illinois Department of Public Health or
5		was using a combination of administrative controls,
6		engineering controls, or personal protective equipment to
7		reduce the transmission of COVID-19 to all employees for
8		at least 14 consecutive days prior to the employee's
9		injury, occupational disease, or period of incapacity
10		resulting from exposure to COVID-19. For purposes of this
11		subsection, "updated" means the guidance in effect at
12		least 14 days prior to the COVID-19 diagnosis. For
13		purposes of this subsection, "personal protective
14		equipment" means industry-specific equipment worn to
15		minimize exposure to hazards that cause illnesses or
16		serious injuries, which may result from contact with
17		biological, chemical, radiological, physical, electrical,
18		mechanical, or other workplace hazards. "Personal
19		protective equipment" includes, but is not limited to,
20		items such as face coverings, gloves, safety glasses,
21		safety face shields, barriers, shoes, earplugs or muffs,
22		hard hats, respirators, coveralls, vests, and full body
23		suits; or
24		(C) the employee was exposed to COVID-19 by an
25		alternate source.
26		(4) The rebuttable presumption created in this subsection

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1		applies to all cases tried after June 5, 2020 (the effective
2		date of Public Act 101-633) and in which the diagnosis of
3		COVID-19 was made on or after March 9, 2020 and on or before
4		June 30, 2021 (including the period between December 31, 2020
5		and the effective date of this amendatory Act of the 101st
6		General Assembly).
7		(5) Under no circumstances shall any COVID-19 case
8		increase or affect any employer's workers' compensation
9		insurance experience rating or modification, but COVID-19
10		costs may be included in determining overall State loss costs.
11		(6) In order for the presumption created in this
12		subsection to apply at trial, for COVID-19 diagnoses occurring
13		on or before June 15, 2020, an employee must provide a
14		confirmed medical diagnosis by a licensed medical practitioner
15		or a positive laboratory test for COVID-19 or for COVID-19
16		antibodies; for COVID-19 diagnoses occurring after June 15,
17		2020, an employee must provide a positive laboratory test for
18		COVID-19 or for COVID-19 antibodies.
19		(7) The presumption created in this subsection does not
20		apply if the employee's place of employment was solely the
21		employee's home or residence for a period of 14 or more
22		consecutive days immediately prior to the employee's injury,
23		occupational disease, or period of incapacity resulted from
24		exposure to COVID-19.
25		(8) The date of injury or the beginning of the employee's
26		occupational disease or period of disability is either the

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1		date that the employee was unable to work due to contraction of
2		COVID-19 or was unable to work due to symptoms that were later
3		diagnosed as COVID-19, whichever came first.
4		(9) An employee who contracts COVID-19, but fails to
5		establish the rebuttable presumption is not precluded from
6		filing for compensation under this Act or under the Workers'
7		Compensation Act.
8		(10) To qualify for temporary total disability benefits
9		under the presumption created in this subsection, the employee
10		must be certified for or recertified for temporary disability.
11		(11) An employer is entitled to a credit against any
12		liability for temporary total disability due to an employee as
13		a result of the employee contracting COVID-19 for (A) any sick
14		leave benefits or extended salary benefits paid to the
15		employee by the employer under Emergency Family Medical Leave
16		Expansion Act, Emergency Paid Sick Leave Act of the Families
17		First Coronavirus Response Act, or any other federal law, or
18		(B) any other credit to which an employer is entitled under the
19		Workers' Compensation Act.
20		(Source: P.A. 101-633, eff. 6-5-20; 101-653, eff. 2-28-21.)
21		Section 220. The Unemployment Insurance Act is amended by
22		changing Sections 211.4 and 614 as follows:
23		(820 ILCS 405/211.4) (from Ch. 48, par. 321.4)
24		Sec. 211.4. A. Notwithstanding any other provision of this

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1		Act, the term "employment" shall include service performed
2		after December 31, 1977, by an individual in agricultural
3		labor as defined in Section 214 when:
4		1. Such service is performed for an employing unit
5		which (a) paid cash wages of $20,000 or more during any
6		calendar quarter in either the current or preceding
7		calendar year to an individual or individuals employed in
8		agricultural labor (not taking into account service in
9		agricultural labor performed before January 1, 1980, by a
10		noncitizen an alien referred to in paragraph 2); or (b)
11		employed in agricultural labor (not taking into account
12		service in agricultural labor performed before January 1,
13		1980, by a noncitizen an alien referred to in paragraph 2)
14		10 or more individuals within each of 20 or more calendar
15		weeks (but not necessarily simultaneously and irrespective
16		of whether the same individuals are or were employed in
17		each such week), whether or not such weeks are or were
18		consecutive, within either the current or preceding
19		calendar year.
20		2. Such service is not performed in agricultural labor
21		if performed before January 1, 1980 or on or after the
22		effective date of this amendatory Act of the 96th General
23		Assembly, by an individual who is a noncitizen an alien
24		admitted to the United States to perform service in
25		agricultural labor pursuant to Sections 214(c) and
26		101(a)(15)(H) of the Immigration and Nationality Act.

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1		B. For the purposes of this Section, any individual who is
2		a member of a crew furnished by a crew leader to perform
3		service in agricultural labor for any other employing unit
4		shall be treated as performing service in the employ of such
5		crew leader if (1) the leader holds a valid certificate of
6		registration under the Farm Labor Contractor Registration Act
7		of 1963, or substantially all the members of such crew operate
8		or maintain tractors, mechanized harvesting or crop dusting
9		equipment, or any other mechanized equipment, which is
10		provided by the crew leader; and (2) the service of such
11		individual is not in employment for such other employing unit
12		within the meaning of subsections A and C of Section 212, and
13		of Section 213.
14		C. For the purposes of this Section, any individual who is
15		furnished by a crew leader to perform service in agricultural
16		labor for any other employing unit, and who is not treated as
17		performing service in the employ of such crew leader under
18		subsection B, shall be treated as performing service in the
19		employ of such other employing unit, and such employing unit
20		shall be treated as having paid cash wages to such individual
21		in an amount equal to the amount of cash wages paid to the
22		individual by the crew leader (either on his own behalf or on
23		behalf of such other employing unit) for the service in
24		agricultural labor performed for such other employing unit.
25		D. For the purposes of this Section, the term "crew
26		leader" means an individual who (1) furnishes individuals to

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1		perform service in agricultural labor for any other employing
2		unit; (2) pays (either on his own behalf or on behalf of such
3		other employing unit) the individuals so furnished by him for
4		the service in agricultural labor performed by them; and (3)
5		has not entered into a written agreement with such other
6		employing unit under which an individual so furnished by him
7		is designated as performing services in the employ of such
8		other employing unit.
9		(Source: P.A. 96-1208, eff. 1-1-11.)
10		(820 ILCS 405/614) (from Ch. 48, par. 444)
11		Sec. 614. Non-resident noncitizens aliens - ineligibility.
12		A noncitizen An alien shall be ineligible for benefits for any
13		week which begins after December 31, 1977, on the basis of
14		wages for services performed by such noncitizen alien, unless
15		the noncitizen alien was an individual who was lawfully
16		admitted for permanent residence at the time such services
17		were performed or otherwise was permanently residing in the
18		United States under color of law at the time such services were
19		performed (including a person an alien who was lawfully
20		present in the United States as a result of the application of
21		the provisions of Section 212(d) (5) of the Immigration and
22		Nationality Act); provided, that any modifications of the
23		provisions of Section 3304(a) (14) of the Federal Unemployment
24		Tax Act which
25		A. Specify other conditions or another effective date

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1		than stated herein for ineligibility for benefits based on
2		wages for services performed by noncitizens aliens, and
3		B. Are required to be implemented under this Act as a
4		condition for the Federal approval of this Act requisite
5		to the full tax credit against the tax imposed by the
6		Federal Act for contributions paid by employers pursuant
7		to this Act, shall be applicable under the provisions of
8		this Section.
9		Any data or information required of individuals who claim
10		benefits for the purpose of determining whether benefits are
11		not payable to them pursuant to this Section shall be
12		uniformly required of all individuals who claim benefits.
13		If an individual would otherwise be eligible for benefits,
14		no determination shall be made that such individual is
15		ineligible for benefits pursuant to this Section because of
16		the individual's noncitizen alien status, except upon a
17		preponderance of the evidence.
18		(Source: P.A. 86-3; 87-122.)
19		Section 995. No acceleration or delay. Where this Act
20		makes changes in a statute that is represented in this Act by
21		text that is not yet or no longer in effect (for example, a
22		Section represented by multiple versions), the use of that
23		text does not accelerate or delay the taking effect of (i) the
24		changes made by this Act or (ii) provisions derived from any
25		other Public Act.

SB3865 Engrossed - 698 - LRB102 24242 RJF 33473 b
1		Section 999. Effective date. This Act takes effect upon
2		becoming law.
SB3865 Engrossed - 699 - LRB102 24242 RJF 33473 b 1 INDEX 2 Statutes amended in order of appearance 3 5 ILCS 312/2-102 from Ch. 102, par. 202-102 4 5 ILCS 805/10 5 20 ILCS 605/605-800 was 20 ILCS 605/46.19a in part 6 20 ILCS 1510/25 7 35 ILCS 5/1501 from Ch. 120, par. 15-1501 8 45 ILCS 160/5 9 45 ILCS 162/10 10 55 ILCS 5/3-12007 from Ch. 34, par. 3-12007 11 65 ILCS 5/11-74.2-14 from Ch. 24, par. 11-74.2-14 12 70 ILCS 2605/11.15 from Ch. 42, par. 331.15 13 110 ILCS 205/9.16 from Ch. 144, par. 189.16 14 110 ILCS 925/3.06 from Ch. 144, par. 1503.06 15 110 ILCS 930/2 from Ch. 144, par. 2302 16 110 ILCS 930/7 from Ch. 144, par. 2307 17 110 ILCS 947/65.50 18 110 ILCS 947/65.110 19 110 ILCS 952/20 20 110 ILCS 975/5 from Ch. 144, par. 2755 21 110 ILCS 975/6.5 22 205 ILCS 635/1-4 23 215 ILCS 5/2 from Ch. 73, par. 614 24 215 ILCS 5/35A-5 25 215 ILCS 5/37 from Ch. 73, par. 649 SB3865 Engrossed - 700 - LRB102 24242 RJF 33473 b 1 215 ILCS 5/58 from Ch. 73, par. 670 2 215 ILCS 5/Art. III.5 3 heading 4 215 ILCS 5/60a from Ch. 73, par. 672a 5 215 ILCS 5/60b from Ch. 73, par. 672b 6 215 ILCS 5/60c from Ch. 73, par. 672c 7 215 ILCS 5/60d from Ch. 73, par. 672d 8 215 ILCS 5/60e from Ch. 73, par. 672e 9 215 ILCS 5/60f from Ch. 73, par. 672f 10 215 ILCS 5/60g from Ch. 73, par. 672g 11 215 ILCS 5/60h from Ch. 73, par. 672h 12 215 ILCS 5/60i from Ch. 73, par. 672i 13 215 ILCS 5/60j from Ch. 73, par. 672j 14 215 ILCS 5/63 from Ch. 73, par. 675 15 215 ILCS 5/86 from Ch. 73, par. 698 16 215 ILCS 5/87 from Ch. 73, par. 699 17 215 ILCS 5/88 from Ch. 73, par. 700 18 215 ILCS 5/103 from Ch. 73, par. 715 19 215 ILCS 5/104 from Ch. 73, par. 716 20 215 ILCS 5/105 from Ch. 73, par. 717 21 215 ILCS 5/Art. VI heading 22 215 ILCS 5/108 from Ch. 73, par. 720 23 215 ILCS 5/109 from Ch. 73, par. 721 24 215 ILCS 5/110 from Ch. 73, par. 722 25 215 ILCS 5/111 from Ch. 73, par. 723 26 215 ILCS 5/112 from Ch. 73, par. 724 SB3865 Engrossed - 701 - LRB102 24242 RJF 33473 b 1 215 ILCS 5/113 from Ch. 73, par. 725 2 215 ILCS 5/113.1 from Ch. 73, par. 725.1 3 215 ILCS 5/114 from Ch. 73, par. 726 4 215 ILCS 5/115 from Ch. 73, par. 727 5 215 ILCS 5/116 from Ch. 73, par. 728 6 215 ILCS 5/117 from Ch. 73, par. 729 7 215 ILCS 5/118 from Ch. 73, par. 730 8 215 ILCS 5/119 from Ch. 73, par. 731 9 215 ILCS 5/120 from Ch. 73, par. 732 10 215 ILCS 5/123 from Ch. 73, par. 735 11 215 ILCS 5/123.1 from Ch. 73, par. 735.1 12 215 ILCS 5/123.3 from Ch. 73, par. 735.3 13 215 ILCS 5/123C-8 from Ch. 73, par. 735C-8 14 215 ILCS 5/126.1 15 215 ILCS 5/126.12 16 215 ILCS 5/126.25 17 215 ILCS 5/131.13 from Ch. 73, par. 743.13 18 215 ILCS 5/132.3 from Ch. 73, par. 744.3 19 215 ILCS 5/133 from Ch. 73, par. 745 20 215 ILCS 5/136 from Ch. 73, par. 748 21 215 ILCS 5/141a from Ch. 73, par. 753a 22 215 ILCS 5/144 from Ch. 73, par. 756 23 215 ILCS 5/144.1 from Ch. 73, par. 756.1 24 215 ILCS 5/146 from Ch. 73, par. 758 25 215 ILCS 5/148 from Ch. 73, par. 760 26 215 ILCS 5/154.5 from Ch. 73, par. 766.5 SB3865 Engrossed - 702 - LRB102 24242 RJF 33473 b 1 215 ILCS 5/156 from Ch. 73, par. 768 2 215 ILCS 5/156.1 from Ch. 73, par. 768.1 3 215 ILCS 5/157 from Ch. 73, par. 769 4 215 ILCS 5/161 from Ch. 73, par. 773 5 215 ILCS 5/162 from Ch. 73, par. 774 6 215 ILCS 5/163 from Ch. 73, par. 775 7 215 ILCS 5/164 from Ch. 73, par. 776 8 215 ILCS 5/166 from Ch. 73, par. 778 9 215 ILCS 5/169 from Ch. 73, par. 781 10 215 ILCS 5/170 from Ch. 73, par. 782 11 215 ILCS 5/173.1 from Ch. 73, par. 785.1 12 215 ILCS 5/179A-5 13 215 ILCS 5/179E-5 14 215 ILCS 5/Art. XII 15 heading 16 215 ILCS 5/180 from Ch. 73, par. 792 17 215 ILCS 5/185.1 from Ch. 73, par. 797.1 18 215 ILCS 5/188 from Ch. 73, par. 800 19 215 ILCS 5/188.1 from Ch. 73, par. 800.1 20 215 ILCS 5/197 from Ch. 73, par. 809 21 215 ILCS 5/201 from Ch. 73, par. 813 22 215 ILCS 5/223 from Ch. 73, par. 835 23 215 ILCS 5/241 from Ch. 73, par. 853 24 215 ILCS 5/292.1 from Ch. 73, par. 904.1 25 215 ILCS 5/302.1 from Ch. 73, par. 914.1 26 215 ILCS 5/308.1 from Ch. 73, par. 920.1 SB3865 Engrossed - 703 - LRB102 24242 RJF 33473 b 1 215 ILCS 5/309.1 from Ch. 73, par. 921.1 2 215 ILCS 5/310.1 from Ch. 73, par. 922.1 3 215 ILCS 5/357.29 from Ch. 73, par. 969.29 4 215 ILCS 5/370 from Ch. 73, par. 982 5 215 ILCS 5/404 from Ch. 73, par. 1016 6 215 ILCS 5/408 from Ch. 73, par. 1020 7 215 ILCS 5/412 from Ch. 73, par. 1024 8 215 ILCS 5/413 from Ch. 73, par. 1025 9 215 ILCS 5/415 from Ch. 73, par. 1027 10 215 ILCS 5/444 from Ch. 73, par. 1056 11 215 ILCS 5/444.1 from Ch. 73, par. 1056.1 12 215 ILCS 5/445 from Ch. 73, par. 1057 13 215 ILCS 5/448 from Ch. 73, par. 1060 14 215 ILCS 5/451 from Ch. 73, par. 1063 15 215 ILCS 5/531.09 from Ch. 73, par. 1065.80-9 16 215 ILCS 5/531.11 from Ch. 73, par. 1065.80-11 17 215 ILCS 5/534.5 from Ch. 73, par. 1065.84-5 18 215 ILCS 5/543.1 from Ch. 73, par. 1065.93-1 19 215 ILCS 5/1103 from Ch. 73, par. 1065.803 20 215 ILCS 100/5 from Ch. 73, par. 1605 21 215 ILCS 105/7 from Ch. 73, par. 1307 22 215 ILCS 150/15 from Ch. 148, par. 215 23 215 ILCS 155/11 from Ch. 73, par. 1411 24 215 ILCS 155/15.1 25 215 ILCS 159/5 26 215 ILCS 159/30 SB3865 Engrossed - 704 - LRB102 24242 RJF 33473 b 1 225 ILCS 50/8 from Ch. 111, par. 7408 2 225 ILCS 459/10 3 305 ILCS 5/5-3 from Ch. 23, par. 5-3 4 310 ILCS 20/5 from Ch. 67 1/2, par. 57 5 315 ILCS 30/18 from Ch. 67 1/2, par. 91.118 6 330 ILCS 61/1-10 7 430 ILCS 65/4 from Ch. 38, par. 83-4 8 430 ILCS 65/8 from Ch. 38, par. 83-8 9 720 ILCS 5/17-6.5 10 720 ILCS 678/2 11 725 ILCS 5/113-8 12 730 ILCS 5/3-2-2 from Ch. 38, par. 1003-2-2 13 730 ILCS 5/5-5-3 14 740 ILCS 80/12 from Ch. 59, par. 12 15 750 ILCS 28/20 16 765 ILCS 60/Act title 17 765 ILCS 60/0.01 from Ch. 6, par. 0.01 18 765 ILCS 60/7 from Ch. 6, par. 7 19 765 ILCS 60/8 from Ch. 6, par. 8 20 765 ILCS 725/Act title 21 765 ILCS 725/0.01 from Ch. 6, par. 8.9 22 765 ILCS 725/1 from Ch. 6, par. 9 23 775 ILCS 5/2-101 24 815 ILCS 400/Act title 25 815 ILCS 400/0.01 from Ch. 111, par. 8050 26 815 ILCS 400/1 from Ch. 111, par. 8051 SB3865 Engrossed - 705 - LRB102 24242 RJF 33473 b