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1 AN ACT concerning State government.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Legislative intent. It is the intent of the
5General Assembly in enacting this amendatory Act of the 102nd
6General Assembly to make only nonsubstantive changes that
7remove the dehumanizing term "alien" from all Illinois
8statutory provisions. No change made by this amendatory Act of
9the 102nd General Assembly shall be interpreted as to make any
10substantive change to existing law, including, but not limited
11to, eligibility for federal programs or benefits that are
12available to a person who meets the definition of "alien"
13under State or federal law.
14 Section 5. The Illinois Notary Public Act is amended by
15changing 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
19and commission as a notary shall complete an application in a
20format prescribed by the Secretary of State to be filed with
21the 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
15applicant for appointment and commission as a notary shall
16complete an application in a format prescribed by the
17Secretary of State to be filed with the Secretary of State,
18stating:
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
11the authority to conduct remote notarizations.
12 (c) Application for electronic notary public commission.
13An application for an electronic notary public commission must
14be filed with the Secretary of State in a manner prescribed by
15the Secretary of State. Every applicant for appointment and
16commission as an electronic notary public shall complete an
17application 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
10public performs an electronic notarial act using audio-video
11communication, he or she must be granted an electronic notary
12public commission by the Secretary of State under this
13Section, and identify the technology that the electronic
14notary public intends to use, which must be approved by the
15Secretary of State.
16 (e) Approval of commission. Upon the applicant's
17fulfillment of the requirements for a notarial commission or
18an electronic notary public commission, the Secretary of State
19shall approve the commission and issue to the applicant a
20unique commission number.
21 (f) Rejection of application. The Secretary of State may
22reject an application for a notarial commission or an
23electronic notary public commission if the applicant fails to
24comply with any Section of this Act.
25(Source: P.A. 102-160 (See Section 99 of P.A. 102-160 for
26effective date of P.A. 102-160).)

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

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1 "Immigration agent" means an agent of federal Immigration
2and Customs Enforcement, federal Customs and Border
3Protection, or any similar or successor agency.
4 "Immigration detainer" means a request to a State or local
5law enforcement agency to provide notice of release or
6maintain custody of an individual based on an alleged
7violation of a civil immigration law, including detainers
8issued under Sections 1226 or 1357 of Title 8 of the United
9States Code or 287.7 or 236.1 of Title 8 of the Code of Federal
10Regulations. "Immigration detainer" includes Form I-247A
11"Immigration Detainer – Notice of Action" and any predecessor
12or successor form.
13 "Law enforcement agency" means an agency of the State or
14of a unit of local government charged with enforcement of
15State, county, or municipal laws or with managing custody of
16detained persons in the State.
17 "Law enforcement official" means any individual with the
18power to arrest or detain individuals, including law
19enforcement officers, corrections officer, and others employed
20or designated by a law enforcement agency. "Law enforcement
21official" includes any probation officer.
22(Source: P.A. 102-234, eff. 8-2-21.)
23 Section 15. The Department of Commerce and Economic
24Opportunity Law of the Civil Administrative Code of Illinois
25is 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
3demand.
4 (a) Grants to provide training in fields affected by
5critical demands for certain skills may be made as provided in
6this Section.
7 (b) The Director may make grants to eligible employers or
8to other eligible entities on behalf of employers as
9authorized in subsection (c) to provide training for employees
10in fields for which there are critical demands for certain
11skills. No participating employee may be an unauthorized
12noncitizen (a person that is not lawfully admitted for
13permanent residence) alien, as defined in 8 U.S.C. 1324a.
14 (c) The Director may accept applications for training
15grant funds and grant requests from: (i) entities sponsoring
16multi-company eligible employee training projects as defined
17in subsection (d), including business associations, strategic
18business partnerships, institutions of secondary or higher
19education, large manufacturers for supplier network companies,
20federal Job Training Partnership Act administrative entities
21or grant recipients, and labor organizations when those
22projects will address common training needs identified by
23participating companies; and (ii) individual employers that
24are undertaking eligible employee training projects as defined
25in subsection (d), including intermediaries and training

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1agents.
2 (d) The Director may make grants to eligible applicants as
3defined in subsection (c) for employee training projects that
4include, but need not be limited to, one or more of the
5following:
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
12the Department shall determine. No grant made under subsection
13(d), however, shall exceed 50% of the direct costs of all
14approved training programs provided by the employer or the
15employer's training agent or other entity as defined in
16subsection (c). Under this Section, allowable costs include,
17but 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
3visits to verify trainee employment dates and wages and to
4ensure that the grantee's financial management system is
5structured to provide for accurate, current, and complete
6disclosure of the financial results of the grant program in
7accordance with all provisions, terms, and conditions
8contained in the grant contract. Each applicant must, on
9request by the Department, provide to the Department a
10notarized certification signed and dated by a duly authorized
11representative of the applicant, or that representative's
12authorized designee, certifying that all participating
13employees are employed at an Illinois facility and, for each
14participating employee, stating the employee's name and
15providing either (i) the employee's social security number or
16(ii) a statement that the applicant has adequate written
17verification that the employee is employed at an Illinois
18facility. The Department may audit the accuracy of
19submissions. Applicants sponsoring multi-company training
20grant programs shall obtain information meeting the
21requirement of this subsection from each participating company
22and provide it to the Department upon request.
23 (g) The Director may establish and collect a schedule of
24charges from subgrantee entities and other system users under
25federal job-training programs for participating in and
26utilizing the Department's automated job-training program

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1information systems if the systems and the necessary
2participation and utilization are requirements of the federal
3job-training programs. All monies collected pursuant to this
4subsection shall be deposited into the Federal Workforce
5Training Fund and may be used, subject to appropriation by the
6General Assembly, only for the purpose of financing the
7maintenance and operation of the automated federal
8job-training information systems.
9(Source: P.A. 99-933, eff. 1-27-17.)
10 Section 20. The Illinois Guaranteed Job Opportunity Act is
11amended 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
15in 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
25changing 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
4distinctly expressed or manifestly incompatible with the
5intent 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,

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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

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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

SB3865 Engrossed- 26 -LRB102 24242 RJF 33473 b
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.

SB3865 Engrossed- 42 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 43 -LRB102 24242 RJF 33473 b
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
4Act is amended by changing Section 5 as follows:
5 (45 ILCS 160/5)
6 Sec. 5. Ratification of Compact. The State of Illinois
7ratifies and approves the Interstate Insurance Receivership
8Compact and enters into that Compact with all other
9jurisdictions legally joining in it in substantially the
10following form:
11
ARTICLE I. PURPOSES
12 The purposes of this Compact are, through means of joint
13and cooperative action among the compacting states:
14 (1) to promote, develop and facilitate orderly, efficient,
15cost-effective, and uniform insurer receivership laws and
16operations;
17 (2) to coordinate interaction between insurer receivership
18and Guaranty Association operations;
19 (3) to create the Interstate Insurance Receivership
20Commission; and
21 (4) to perform these and such other related functions as
22may be consistent with the state regulation of the business of
23insurance pursuant to the McCarran-Ferguson Act.

SB3865 Engrossed- 44 -LRB102 24242 RJF 33473 b
1
ARTICLE II. DEFINITIONS
2 For the purposes of this Compact:
3 (1) "By-laws" means those by-laws prescribed by the
4Commission for its governance or for directing or controlling
5the Commission's actions or conduct.
6 (2) "Compacting state" means any state which has enacted
7enabling legislation for this Compact.
8 (3) "Commission" means the Interstate Insurance
9Receivership Commission established by this Compact.
10 (4) "Commissioner" means the chief insurance regulatory
11official of a state.
12 (5) "Deputy Receiver" means a person appointed or retained
13by a Receiver and who is the Receiver's duly authorized
14representative for administering one or more estates.
15 (6) "Domiciliary state" means the state in which an
16insurer is incorporated or organized; or, in the case of a
17non-domestic an alien insurer, its state of entry; or in the
18case of an unauthorized insurer not incorporated, organized,
19or entered in any state, a state where the insurer is engaged
20in or doing business.
21 (7) "Estate" means the assets and liabilities of any
22insurer in receivership.
23 (8) "Guaranty Association" means an insurance guaranty
24fund or association or any similar entity now or hereafter
25created by statute in a compacting state, other than a

SB3865 Engrossed- 45 -LRB102 24242 RJF 33473 b
1receivership, to pay or assume, in whole or in part, the
2contractual claim obligations of insolvent insurers.
3 (9) "Insurer" means any person or entity that has done,
4purports to do, is doing, or is licensed to do any insurance or
5reinsurance business, or is or has been subject to the
6authority of, or to liquidation, rehabilitation, supervision,
7conservation, or ancillary receivership by, any Commissioner.
8 (10) "Member" means the Commissioner of a compacting state
9or his or her designee, who shall be a person officially
10connected with the Commissioner and who is wholly or
11principally employed by the Commissioner.
12 (11) "Non-compacting state" means a state which has not
13enacted enabling legislation for this Compact.
14 (12) "Operating procedures" means procedures promulgated
15by the Commission implementing a rule, an existing law in a
16compacting state, or a provision of this Compact.
17 (13) "Publication" means the act of publishing in the
18official state publication in a compacting state or in such
19other publication as may be established by the Commission.
20 (14) "Receiver" means receiver, liquidator, rehabilitator,
21conservator, or ancillary receiver as the context requires.
22 (15) "Receivership" means any liquidation, rehabilitation,
23conservation, or ancillary receivership proceeding as the
24context requires.
25 (16) "Rules" means acts of the Commission, duly
26promulgated pursuant to Article VII of this Compact,

SB3865 Engrossed- 46 -LRB102 24242 RJF 33473 b
1substantially affecting interested parties in addition to the
2Commission, which shall have the force and effect of law in the
3compacting states.
4 (17) "State" means any state, district or territory of the
5United States of America.
6
ARTICLE III. ESTABLISHMENT OF THE COMMISSION AND VENUE
7 (1) The compacting states hereby create and establish an
8entity known as the Interstate Insurance Receivership
9Commission.
10 (2) The Commission is a body corporate of each compacting
11state.
12 (3) The Commission is a not-for-profit entity, separate
13and distinct from the compacting states.
14 (4) The Commission is solely responsible for its
15liabilities except as otherwise provided in this Compact.
16 (5) Except as otherwise specifically provided in state or
17federal law in the jurisdiction where the Commission's
18principal office is located or where the Commission is acting
19as Receiver, venue is proper and judicial proceedings by or
20against the Commission shall be brought in a court of
21competent jurisdiction where the Commission's principal office
22is located.
23
ARTICLE IV. POWERS OF THE COMMISSION
24 The Commission shall have all of the following powers:

SB3865 Engrossed- 47 -LRB102 24242 RJF 33473 b
1 (1) To promulgate rules which shall have the force and
2effect of statutory law and shall be binding in the compacting
3states to the extent and in the manner provided in this
4Compact.
5 (2) To promulgate operating procedures which shall be
6binding in the compacting states to the extent and in the
7manner provided in this Compact.
8 (3) To oversee, supervise, and coordinate the activities
9of receivers in compacting states.
10 (4) To act as Receiver of insurers organized under the
11laws of, engaged in, or doing the business of insurance in a
12compacting state upon the request of the Commissioner of such
13state or when grounds for receivership by the Commission exist
14under Article IX of this Compact.
15 (5) To act as Deputy Receiver of insurers organized under
16the laws of, engaged in, or doing the business of insurance in
17a non-compacting state in accordance with Article IX of this
18Compact.
19 (6) To act as ancillary Receiver in a compacting state of
20an insurer domiciled in a non-compacting state.
21 (7) To monitor the activities and functions of Guaranty
22Associations in the compacting states.
23 (8) To delegate its operating authority or functions;
24provided, that its rulemaking authority under Article VII of
25this Compact shall not be delegated.
26 (9) To bring or prosecute legal proceedings or actions in

SB3865 Engrossed- 48 -LRB102 24242 RJF 33473 b
1its name as the Commission, or in the name of the Commission
2acting as Receiver.
3 (10) To bring or prosecute legal proceedings or actions as
4Receiver on behalf of an estate or its policyholders and
5creditors; provided, that any Guaranty Association's standing
6to sue or be sued under applicable law shall not be affected.
7 (11) To issue subpoenas requiring the attendance and
8testimony 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
12personnel including, but not limited to, members and their
13staff.
14 (15) To elect or appoint such officers, attorneys,
15employees, or agents, and to fix their compensation, define
16their duties, and determine their qualifications; and to
17establish the Commission's personnel policies and programs
18relating to, among other things, conflicts of interest, rates
19of compensation, and qualifications of personnel.
20 (16) To accept any and all donations and grants of money,
21equipment, supplies, materials, and services, and to receive,
22utilize, and dispose of the same.
23 (17) To lease, purchase, accept gifts or donations of, or
24otherwise to own, hold, improve or use, any property, real,
25personal, or mixed.
26 (18) To sell, convey, mortgage, pledge, lease, exchange,

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1abandon, or otherwise dispose of any property, real, personal,
2or mixed.
3 (19) To enforce compliance with Commission rules,
4operating procedures, and by-laws.
5 (20) To provide for dispute resolution among compacting
6states and Receivers.
7 (21) To represent and advise compacting states on issues
8relating to insurers domiciled or doing business in
9non-compacting jurisdictions, consistent with the purposes of
10this compact.
11 (22) To provide advice and training to receivership
12personnel of compacting states, and to be a resource for
13compacting states by maintaining a reference library of
14relevant 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,
18an industry advisory committee and an executive committee of
19members.
20 (26) To provide and receive information relating to
21receiverships and Guaranty Associations and to cooperate with
22law enforcement agencies.
23 (27) To adopt and use a corporate seal.
24 (28) To perform such other functions as may be necessary
25or appropriate to achieve the purposes of this Compact as may
26be consistent with the state regulation of the business of

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1insurance 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
5member. A member shall be qualified to serve in such capacity
6under or pursuant to the applicable law of the compacting
7state. A compacting state retains the discretionary right to
8determine the due election or appointment and qualification of
9its 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,
12prescribe by-laws to govern its conduct as may be necessary or
13appropriate to carry out the purposes of the Compact,
14including, 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)
18governing any general or specific delegation of any authority
19or 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,
13elect annually from among its members a chairperson and a vice
14chairperson, each of whom shall have such authorities and
15duties as may be specified in the by-laws. The chairperson or,
16in his or her absence or disability, a member designated in
17accordance with the by-laws, shall preside at all meetings of
18the Commission. The officers so elected shall serve without
19compensation or remuneration from the Commission; provided,
20that subject to the availability of budgeted funds, the
21officers shall be reimbursed for any actual and necessary
22costs and expenses incurred by them in the performance of
23their duties and responsibilities as officers of the
24Commission.
25 (2) The Commission may, by a majority of the members,

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

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

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

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

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

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1 (3) Other than the promulgation of such rules as are
2necessary for the orderly operation of the Commission, the
3first rule to be considered by the Commission shall be uniform
4provisions governing insurer receiverships including, but not
5limited to, provisions requiring compacting states to
6implement, execute, and administer in a fair, just, effective,
7and efficient manner rules and operating procedures relating
8to receiverships. The Commission shall within 3 years of the
9adoption of this Compact by 2 or more states, promulgate such
10uniform provisions through the rulemaking process. Such
11uniform provisions shall become law in all of the compacting
12states upon legislative enactment in a majority of the
13compacting states.
14 (4) All rules and amendments shall become binding as of
15the date specified in each rule or amendment; provided, that
16if a compacting state expressly rejects such rule or amendment
17through legislative enactment as of the expiration of the
18second full calendar year after such rule is promulgated, such
19rule or amendment shall have no further force or effect in the
20rejecting compacting state. If a majority of compacting states
21reject a rule, then such rule shall have no further force or
22effect in any compacting state.
23 (5) When promulgating a rule or operating procedure, the
24Commission 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
12procedure is promulgated, any interested person may file a
13petition in a court of competent jurisdiction where the
14Commission's principal office is located for judicial review
15of such rule or operating procedure. If the court finds that
16the Commission's action is not supported by substantial
17evidence in the rulemaking record, the court shall hold the
18rule 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
23operations of receiverships in compacting states and shall
24monitor receiverships being administered in non-compacting

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1states which may significantly affect compacting states.
2 (2) To aid its monitoring, oversight, and coordination
3responsibilities, the Commission shall establish operating
4procedures requiring each member to submit written reports to
5the 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
19requiring Receivers to submit to the Commission periodic
20written reports and such additional information and
21documentation as the Commission may reasonably request. Each
22compacting state's Receivers shall establish the capability to
23obtain and provide all such records, data, and information
24required by the Commission in accordance with the Commission's
25operating procedures.
26 (4) Except as to privileged records, data, and

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1information, the laws of any compacting state pertaining to
2confidentiality or nondisclosure shall not relieve any
3compacting state Commissioner of the responsibility to
4disclose any relevant records, data, or information to the
5Commission; provided, that disclosure to the Commission shall
6not be deemed to waive or otherwise affect any confidentiality
7requirement; and further provided, that the Commission shall
8be subject to the compacting state's laws pertaining to
9confidentiality and nondisclosure with respect to all such
10records, data, and information in its possession.
11 (5) The courts and executive agencies in each compacting
12state shall enforce this Compact and shall take all actions
13necessary and appropriate to effectuate the Compact's purposes
14and intent. In any receivership or other judicial or
15administrative proceeding in a compacting state pertaining to
16the subject matter of this Compact which may affect the
17powers, responsibilities, or actions of the Commission, the
18Commission shall be entitled to receive all service of process
19in any such proceeding and shall have standing to intervene in
20the receivership or proceeding for all purposes.
21 (6) The Commission shall analyze and correlate records,
22data, information, and reports received from Receivers and
23Guaranty Associations and shall make recommendations for
24improving their performance to the compacting states. The
25Commission shall include summary information and data
26regarding 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
3member, to resolve any disputes or other issues which are
4subject to this Compact and which may arise among compacting
5states and non-compacting states.
6 (2) The compacting states shall report to the Commission
7on issues or activities of concern to them and cooperate with
8and support the Commission in the discharge of its duties and
9responsibilities.
10 (3) The Commission shall promulgate an operating procedure
11providing for binding dispute resolution for disputes among
12Receivers.
13 (4) The Commission shall facilitate voluntary dispute
14resolution for disputes among Guaranty Associations and
15Receivers.
16
ARTICLE IX. RECEIVERSHIP FUNCTIONS OF THE COMMISSION
17 (1) The Commission has authority to act as Receiver of any
18insurer domiciled, engaged in, or doing business in a
19compacting state upon the request of the Commissioner of such
20compacting 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
15domiciled or doing business in a compacting state in the event
16that the member acting as Receiver in that compacting state
17fails to comply with duly promulgated Commission rules or
18operating procedures. The Commission shall notify such member
19in writing of noncompliance with Commission rules or operating
20procedures. If the member acting as Receiver fails to remedy
21such noncompliance within 10 days after receipt of such
22notification, the Commission may petition the supervising
23court before which such receivership is pending for an order
24substituting and appointing the Commission as Receiver of the
25estate.
26 (3) The Commission shall not act as Receiver of an estate

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1which appears to lack sufficient assets to fund such
2receivership unless the compacting state makes provisions for
3the payment of the estate's administrative expenses
4satisfactory to the Commission.
5 (4) The Commission may act as Deputy Receiver for any
6insurer domiciled or doing business in a non-compacting state
7in accordance with such state's laws upon request of that
8non-compacting state's Commissioner and approval of the
9Commission.
10 (5) With respect to receiverships pending in a compacting
11state on the effective date of the enactment of this Compact by
12the 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
22the reasonable expenses of its establishment and organization.
23 (2) Except as otherwise provided in this Compact or by act
24of the Commission, the costs and expenses of each compacting
25state shall be the sole and exclusive responsibility of the

SB3865 Engrossed- 65 -LRB102 24242 RJF 33473 b
1respective compacting state. The Commission may pay or provide
2for actual and necessary costs and expenses for attendance of
3its members at official meetings of the Commission or its
4designated committees.
5 (3) The Commission shall levy on and collect an annual
6assessment from each compacting state and each insurer
7authorized to do business in a compacting state, and writing
8direct insurance, to cover the cost of the internal operations
9and activities of the Commission and its staff in a total
10amount 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

SB3865 Engrossed- 66 -LRB102 24242 RJF 33473 b
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
4manner for the costs and expenses incurred by the Commission
5and its staff acting as Receiver of estates to the extent that
6an insurer's assets may be insufficient for the effective
7administration 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
18Commission until its first annual budget is adopted and
19related assessments have been made, contributions from
20compacting states and others may be accepted and a one time
21assessment on insurers doing a direct insurance business in
22the compacting states may be made not to exceed $450 per
23insurer.
24 (6) The Commission's adopted budget for a fiscal year
25shall not be approved until it has been subject to notice and
26comment as set forth in Article VII of this Compact. The budget

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

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

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

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

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

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

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1be enforceable.
2 (2) The provisions of this Compact shall be liberally
3construed 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
7law of a compacting state that is not inconsistent with this
8Compact.
9 (2) All compacting states' laws conflicting with this
10Compact 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
13rules and operating procedures promulgated by the Commission,
14are binding upon the compacting states.
15 (2) All agreements between the Commission and the
16compacting states are binding in accordance with their terms.
17 (3) Upon the request of a party to a conflict over meaning
18or interpretation of Commission actions, and upon a majority
19vote of the compacting states, the Commission may issue
20advisory opinions regarding such meaning or interpretation.
21 (4) In the event any provision of this Compact exceeds the
22constitutional limits imposed on the legislature of any
23compacting state, the obligations, duties, powers, or

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1jurisdiction sought to be conferred by such provision upon the
2Commission shall be ineffective and such obligations, duties,
3powers or jurisdiction shall remain in the compacting state
4and shall be exercised by the agency thereof to which such
5obligations, duties, powers, or jurisdiction are delegated by
6law 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
9Compact is amended by changing Section 10 as follows:
10 (45 ILCS 162/10)
11 Sec. 10. Ratification. The State of Illinois ratifies,
12approves, and adopts the following interstate compact:
13
Article I. PURPOSES
14 The purposes of this Compact are, through means of joint
15and 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
4joint public agency known as the "Interstate Insurance Product
5Regulation Commission." Pursuant to Article IV, the Commission
6will have the power to develop Uniform Standards for Product
7lines, receive and provide prompt review of Products filed
8therewith, and give approval to those Product filings
9satisfying applicable Uniform Standards; provided, it is not
10intended for the Commission to be the exclusive entity for
11receipt and review of insurance product filings. Nothing
12herein shall prohibit any Insurer from filing its product in
13any State wherein the Insurer is licensed to conduct the
14business of insurance; and any such filing shall be subject to
15the laws of the State where filed.
16 2. The Commission is a body corporate and politic, and an
17instrumentality of the Compacting States.
18 3. The Commission is solely responsible for its
19liabilities except as otherwise specifically provided in this
20Compact.
21 4. Venue is proper and judicial proceedings by or against
22the Commission shall be brought solely and exclusively in a
23Court of competent jurisdiction where the principal office of
24the 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
21Member. Each Member shall be qualified to serve in that
22capacity pursuant to applicable law of the Compacting State.
23Any Member may be removed or suspended from office as provided
24by the law of the State from which he or she shall be
25appointed. Any vacancy occurring in the Commission shall be

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1filled in accordance with the laws of the Compacting State
2wherein the vacancy exists. Nothing herein shall be construed
3to affect the manner in which a Compacting State determines
4the election or appointment and qualification of its own
5Commissioner.
6 b. Each Member shall be entitled to one vote and shall have
7an opportunity to participate in the governance of the
8Commission in accordance with the Bylaws. Notwithstanding any
9provision herein to the contrary, no action of the Commission
10with respect to the promulgation of a Uniform Standard shall
11be effective unless two-thirds (2/3) of the Members vote in
12favor thereof.
13 c. The Commission shall, by a majority of the Members,
14prescribe Bylaws to govern its conduct as may be necessary or
15appropriate to carry out the purposes, and exercise the
16powers, 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
7form and file a copy thereof and a copy of any amendment
8thereto, with the appropriate agency or officer in each of the
9Compacting 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
5duties as may be set forth in the Bylaws, including but not
6limited 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
2Management Committee, with each having such authority and
3duties, as may be specified in the Bylaws.
4 d. The Management Committee may, subject to the approval
5of the Commission, appoint or retain an executive director for
6such period, upon such terms and conditions and for such
7compensation as the Commission may deem appropriate. The
8executive director shall serve as secretary to the Commission,
9but shall not be a Member of the Commission. The executive
10director shall hire and supervise such other staff as may be
11authorized by the Commission.
12 3. Legislative and Advisory Committees.
13 a. A legislative committee comprising state legislators or
14their designees shall be established to monitor the operations
15of, and make recommendations to, the Commission, including the
16Management Committee; provided that the manner of selection
17and term of any legislative committee member shall be as set
18forth in the Bylaws. Prior to the adoption by the Commission of
19any Uniform Standard, revision to the Bylaws, annual budget or
20other significant matter as may be provided in the Bylaws, the
21Management Committee shall consult with and report to the
22legislative committee.
23 b. The Commission shall establish two (2) advisory
24committees, one of which shall comprise consumer
25representatives independent of the insurance industry, and the
26other comprising insurance industry representatives.

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

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

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

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1for insurance issues of its intention to adopt the Uniform
2Standard. The Commission in adopting a Uniform Standard shall
3consider fully all submitted materials and issue a concise
4explanation of its decision.
5 3. Effective Date and Opt Out of a Uniform Standard. A
6Uniform Standard shall become effective ninety (90) days after
7its promulgation by the Commission or such later date as the
8Commission may determine; provided, however, that a Compacting
9State may opt out of a Uniform Standard as provided in this
10Article. "Opt out" shall be defined as any action by a
11Compacting State to decline to adopt or participate in a
12promulgated Uniform Standard. All other Rules and Operating
13Procedures, and amendments thereto, shall become effective as
14of the date specified in each Rule, Operating Procedure or
15amendment.
16 4. Opt Out Procedure. A Compacting State may opt out of a
17Uniform Standard, either by legislation or regulation duly
18promulgated by the Insurance Department under the Compacting
19State's Administrative Procedure Act. If a Compacting State
20elects 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,
23or at the time the State becomes a Compacting State and (b)
24find that the Uniform Standard does not provide reasonable
25protections to the citizens of the State, given the conditions
26in the State. The Commissioner shall make specific findings of

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

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

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

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

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

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

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

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

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1 6. The Commission shall keep complete and accurate
2accounts of all its internal receipts, including grants and
3donations, and disbursements of all funds under its control.
4The internal financial accounts of the Commission shall be
5subject to the accounting procedures established under its
6Bylaws. The financial accounts and reports including the
7system of internal controls and procedures of the Commission
8shall be audited annually by an independent certified public
9accountant. Upon the determination of the Commission, but no
10less frequently than every three (3) years, the review of the
11independent auditor shall include a management and performance
12audit of the Commission. The Commission shall make an Annual
13Report to the Governor and legislature of the Compacting
14States, which shall include a report of the independent audit.
15The Commission's internal accounts shall not be confidential
16and such materials may be shared with the Commissioner of any
17Compacting State upon request, provided, however, that any
18work papers related to any internal or independent audit and
19any information regarding the privacy of individuals and
20insurers' proprietary information, including trade secrets,
21shall remain confidential.
22 7. No Compacting State shall have any claim to or
23ownership of any property held by or vested in the Commission
24or to any Commission funds held pursuant to the provisions of
25this 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
4legislative enactment of the Compact into law by two
5Compacting States; provided, the Commission shall become
6effective for purposes of adopting Uniform Standards for,
7reviewing, and giving approval or disapproval of, Products
8filed with the Commission that satisfy applicable Uniform
9Standards only after twenty-six (26) States are Compacting
10States or, alternatively, by States representing greater than
11forty percent (40%) of the premium volume for life insurance,
12annuity, disability income and long-term care insurance
13products, based on records of the NAIC for the prior year.
14Thereafter, it shall become effective and binding as to any
15other Compacting State upon enactment of the Compact into law
16by that State.
17 3. Amendments to the Compact may be proposed by the
18Commission for enactment by the Compacting States. No
19amendment shall become effective and binding upon the
20Commission and the Compacting States unless and until all
21Compacting 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
25remain binding upon each and every Compacting State; provided,

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

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

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

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1unenforceable, the remaining provisions of the Compact shall
2be enforceable.
3 2. The provisions of this Compact shall be liberally
4construed 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
8law of a Compacting State, except as provided in paragraph b of
9this Article.
10 b. For any Product approved or certified to the
11Commission, the Rules, Uniform Standards and any other
12requirements of the Commission shall constitute the exclusive
13provisions applicable to the content, approval and
14certification of such Products. For Advertisement that is
15subject to the Commission's authority, any Rule, Uniform
16Standard or other requirement of the Commission which governs
17the content of the Advertisement shall constitute the
18exclusive provision that a Commissioner may apply to the
19content of the Advertisement. Notwithstanding the foregoing,
20no action taken by the Commission shall abrogate or restrict:
21(i) the access of any person to state courts; (ii) remedies
22available under state law related to breach of contract, tort,
23or other laws not specifically directed to the content of the
24Product; (iii) state law relating to the construction of
25insurance contracts; or (iv) the authority of the attorney

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1general of the state, including but not limited to maintaining
2any actions or proceedings, as authorized by law.
3 c. All insurance products filed with individual States
4shall 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
7Rules and Operating Procedures promulgated by the Commission,
8are binding upon the Compacting States.
9 b. All agreements between the Commission and the
10Compacting States are binding in accordance with their terms.
11 c. Upon the request of a party to a conflict over the
12meaning or interpretation of Commission actions, and upon a
13majority vote of the Compacting States, the Commission may
14issue advisory opinions regarding the meaning or
15interpretation in dispute.
16 d. In the event any provision of this Compact exceeds the
17constitutional limits imposed on the legislature of any
18Compacting State, the obligations, duties, powers or
19jurisdiction sought to be conferred by that provision upon the
20Commission shall be ineffective as to that Compacting State,
21and those obligations, duties, powers or jurisdiction shall
22remain in the Compacting State and shall be exercised by the
23agency thereof to which those obligations, duties, powers or
24jurisdiction are delegated by law in effect at the time this
25Compact 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
2Section 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)
5The Director of Personnel shall prepare and submit to the
6commission proposed rules for the classified service. The
7director shall give at least 10 days' notice to the heads of
8all departments or agencies affected and they shall be given
9an opportunity, upon their request, to appear before the
10commission to express their views thereon before action is
11taken by the commission.
12 (b) The rules, as adopted pursuant to subsection (a) of
13Section 3-12005 shall provide for:
14 (1) preparation, maintenance and revision of a position
15classification plan for all positions in the classified
16service, based upon the similarity of duties performed and
17responsibilities assumed, so that the same qualifications may
18reasonably be required and the same schedule of pay may be
19applied to all positions in the same class. Each position
20authorized by the Board shall be allocated by the director to
21the proper class and assigned to the appropriate pay range for
22that class.
23 (2) promotion which shall give appropriate consideration
24to the applicant's qualifications, record of performance,

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

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

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1off, giving consideration in both layoff and reemployment to
2performance record and seniority in service.
3 (13) keeping records of performance of all employees in
4the classified service.
5 (14) suspension, demotion or dismissal of an employee for
6misconduct, inefficiency, incompetence, insubordination,
7malfeasance or other unfitness to render effective service and
8for the investigation and hearing of appeals of any employee
9recommended for suspension, demotion or dismissal by a
10department head for any of the foregoing reasons.
11 (15) establishment of a plan for resolving employee
12grievances and complaints, including an appeals procedure.
13 (16) hours of work, holidays and attendance regulations,
14and for annual, sick and special leaves of absence, with or
15without pay, or at reduced pay.
16 (17) development of employee morale, safety and training
17programs.
18 (18) establishment of a period of probation, the length of
19which shall be determined by the complexity of the work
20involved, but which shall not exceed one year without special
21written approval from the commission.
22 (19) such other rules, not inconsistent with this
23Division, 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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1changing 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
4transfer and sell the fee simple title, or any lesser estate
5that they acquired to all or any part of the real property
6within the redevelopment area. No such sale shall be
7inconsistent with the provisions of paragraph (e) of Section
811-74.2-8.
9 Such sales and transfers may be made to:
10 (1) Any individual, association or corporation, organized
11under the laws of this State or of any other State or country,
12which may legally make such investments in this State,
13including foreign and non-domestic alien insurance companies,
14as defined in Section 2 of the "Illinois Insurance Code"; or
15 (2) Any body politic and corporate, public corporation or
16private individual, corporation, association or interest
17empowered by law to acquire, develop and use such real
18property for such uses, public or private, as are in
19accordance with the final redevelopment plan.
20 To provide that the real property sold by the corporate
21authorities is used in accordance with the final redevelopment
22plan, the corporate authorities shall inquire into and satisfy
23themselves concerning the financial ability of the purchaser
24to complete the redevelopment in accordance with the
25redevelopment plan and shall require the purchaser to execute

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1in writing such undertakings as the corporate authorities may
2deem necessary to obligate the purchaser to:
3 (1) Use the land for the purposes designated in the
4approved plan;
5 (2) Commence and complete the building of the improvements
6or the renovation of the property within the periods of time
7which the corporate authorities fix as reasonable; and
8 (3) Comply with such other conditions as are necessary to
9carry out the purposes of the final redevelopment plan.
10 Any redevelopment area may be sold either as an entirety
11or in such parcels as the corporate authorities may select. It
12is not necessary that title be acquired to all real property
13within the redevelopment area before the sale of a part
14thereof may be made as provided in this Section. All real
15property sold shall be sold at its use value which may be less
16than its acquisition cost. For purposes of this Division, use
17value represents the value at which the corporate authorities
18determine that such land should be made available in order
19that it may be developed or redeveloped for the purposes
20specified in the final redevelopment plan.
21(Source: P.A. 81-3.)
22 Section 50. The Metropolitan Water Reclamation District
23Act 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
2work to be done by any such sanitary district unless he or she
3is a citizen of the United States, a national of the United
4States under Section 1401 of Title 8 of the United States Code,
5a person an alien lawfully admitted for permanent residence
6under Section 1101 of Title 8 of the United States Code, an
7individual who has been granted asylum under Section 1158 of
8Title 8 of the United States Code, or an individual who is
9otherwise 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
12by 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
15education. To require public institutions of higher education
16to develop and implement methods and strategies to increase
17the participation of minorities, women and individuals with
18disabilities who are traditionally underrepresented in
19education programs and activities. For the purpose of this
20Section, minorities shall mean persons who are citizens of the
21United States or lawful permanent resident noncitizens aliens
22of 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
17this Section. The Board shall also do the following:
18 (a) require all public institutions of higher education to
19develop and submit plans for the implementation of this
20Section;
21 (b) conduct periodic review of public institutions of
22higher education to determine compliance with this Section;
23and if the Board finds that a public institution of higher
24education is not in compliance with this Section, it shall
25notify 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
2strategies designed to increase participation of students in
3education programs and activities in which minorities, women
4and individuals with disabilities are traditionally
5underrepresented, and monitor the success of students in such
6education programs and activities;
7 (e) encourage minority student recruitment and retention
8in colleges and universities. In implementing this paragraph,
9the Board shall undertake but need not be limited to the
10following: the establishment of guidelines and plans for
11public institutions of higher education for minority student
12recruitment and retention, the review and monitoring of
13minority student programs implemented at public institutions
14of higher education to determine their compliance with any
15guidelines and plans so established, the determination of the
16effectiveness and funding requirements of minority student
17programs at public institutions of higher education, the
18dissemination of successful programs as models, and the
19encouragement of cooperative partnerships between community
20colleges and local school attendance centers which are
21experiencing difficulties in enrolling minority students in
22four-year colleges and universities;
23 (f) mandate all public institutions of higher education to
24submit data and information essential to determine compliance
25with this Section. The Board shall prescribe the format and
26the date for submission of this data and any other education

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

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

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

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1United States or a lawful permanent resident noncitizen alien
2of 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
23eligible for an award under the provisions of this Act when the
24Program 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
21pursuing a graduate or professional degree program at a
22qualified institution of higher education.
23 The Board shall by rule promulgate, pursuant to the
24Illinois Administrative Procedure Act, precise standards to be
25used by the Program Board to determine whether a program
26applicant has above average academic ability to pursue a

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1graduate or professional degree.
2(Source: P.A. 93-862, eff. 8-4-04.)
3 Section 70. The Higher Education Student Assistance Act is
4amended 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
7scholarships.
8 (a) Five hundred new scholarships shall be provided each
9year for qualified high school students or high school
10graduates who desire to pursue full-time undergraduate studies
11in teacher education at public or private universities or
12colleges and community colleges in this State. The Commission,
13in accordance with rules and regulations promulgated for this
14program, shall provide funding and shall designate each year's
15new recipients from among those applicants who qualify for
16consideration 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
8Education prior to the effective date of this amendatory Act
9of 1993 pursuant to the exercise of any right, power, duty,
10responsibility or matter of pending business transferred from
11the State Board of Education to the Commission under this
12Section shall be affected thereby, and all such rules and
13regulations shall become the rules and regulations of the
14Commission until modified or changed by the Commission in
15accordance with law.
16 If in any year the number of qualified applicants exceeds
17the number of scholarships to be awarded, the Commission shall
18give priority in awarding scholarships to students in
19financial need. The Commission shall consider factors such as
20the applicant's family income, the size of the applicant's
21family and the number of other children in the applicant's
22family attending college in determining the financial need of
23the individual.
24 Unless otherwise indicated, these scholarships shall be
25good for a period of up to 4 years while the recipient is
26enrolled for residence credit at a public or private

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

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14-year teaching requirement, together with interest at 8% per
2year on that amount. However, this obligation to repay does
3not apply when the failure to fulfill the teaching requirement
4results from involuntarily leaving the profession due to a
5decrease in the number of teachers employed by the school
6board or a discontinuation of a type of teaching service under
7Section 24-12 of the School Code or from the death or
8adjudication as incompetent of the person holding the
9scholarship. No claim for repayment may be filed against the
10estate of such a decedent or incompetent.
11 Each person applying for such a scholarship shall be
12provided with a copy of this subsection at the time he or she
13applies for the benefits of such scholarship.
14 (c) This Section is substantially the same as Sections
1530-14.5 and 30-14.6 of the School Code, which are repealed by
16this amendatory Act of 1993, and shall be construed as a
17continuation of the teacher training undergraduate scholarship
18program established by that prior law, and not as a new or
19different teacher training undergraduate scholarship program.
20The State Board of Education shall transfer to the Commission,
21as the successor to the State Board of Education for all
22purposes of administering and implementing the provisions of
23this Section, all books, accounts, records, papers, documents,
24contracts, agreements, and pending business in any way
25relating to the teacher training undergraduate scholarship
26program continued under this Section, and all scholarships at

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1any time awarded under that program by, and all applications
2for any such scholarship at any time made to, the State Board
3of Education shall be unaffected by the transfer to the
4Commission of all responsibility for the administration and
5implementation of the teacher training undergraduate
6scholarship program continued under this Section. The State
7Board of Education shall furnish to the Commission such other
8information as the Commission may request to assist it in
9administering 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
13Professional Educator License scholarship.
14 (a) Subject to appropriation, beginning with awards for
15the 2022-2023 academic year, the Commission shall award
16annually up to 250 Post-Master of Social Work School Social
17Work Professional Educator License scholarships to a person
18who:
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
5fiscal year is insufficient to provide scholarships to all
6qualified applicants, the Commission shall allocate the
7appropriation in accordance with this subsection (b). If funds
8are insufficient to provide all qualified applicants with a
9scholarship as authorized by this Section, the Commission
10shall allocate the available scholarship funds for that fiscal
11year to qualified applicants who submit a complete application
12on or before a date specified by the Commission, based on the
13following 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
23issued pursuant to rules adopted by the Commission. In
24awarding scholarships, the Commission shall give priority to
25those applicants who are members of a racial minority. Racial
26minorities are underrepresented as school social workers in

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1elementary and secondary schools in this State, and the
2General Assembly finds that it is in the interest of this State
3to provide them with priority consideration for programs that
4encourage their participation in this field and thereby foster
5a profession that is more reflective of the diversity of
6Illinois students and the parents they will serve. A more
7reflective workforce in school social work allows improved
8outcomes for students and a better utilization of services.
9Therefore, the Commission shall give priority to those
10applicants who are members of a racial minority. In this
11subsection (c), "racial minority" means a person who is a
12citizen of the United States or a lawful permanent resident
13noncitizen 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
25tuition and mandatory fees at the University of Illinois,
26Southern Illinois University, Chicago State University,

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

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

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1and is able to provide evidence of that fact; or (v) becomes a
2person with a permanent total disability, as established by
3the sworn affidavit of a qualified physician.
4(Source: P.A. 102-621, eff. 1-1-22.)
5 Section 75. The Mental Health Graduate Education
6Scholarship 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
10year, the Department, in accordance with rules adopted by it
11for this program, shall provide scholarships to individuals
12selected from among those applicants who qualify for
13consideration 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
23exceeds the number of scholarships to be awarded, the
24Department shall, in consultation with the Advisory Council,

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1consider the following factors in granting priority in
2awarding 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.
9The Department may add to and further define these merit
10criteria by rule.
11 (c) Unless otherwise indicated, scholarships shall be
12awarded to recipients at approved institutions for a period of
13up to 2 years if the recipient is enrolled in a master's degree
14program and up to 4 years if the recipient is enrolled in a
15doctoral degree program.
16(Source: P.A. 96-672, eff. 8-25-09.)
17 Section 80. The Nursing Education Scholarship Law is
18amended 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
21fall term of the 2004-2005 academic year, the Department, in
22accordance with rules and regulations promulgated by it for
23this program, shall provide scholarships to individuals
24selected from among those applicants who qualify for

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1consideration 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
15the number of scholarships to be awarded, the Department
16shall, in consultation with the Illinois Nursing Workforce
17Center Advisory Board, consider the following factors in
18granting 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
10to recipients at approved institutions for a period of up to 2
11years if the recipient is enrolled in an associate degree in
12nursing program, up to 3 years if the recipient is enrolled in
13a hospital-based diploma in nursing program, up to 4 years if
14the recipient is enrolled in a baccalaureate degree in nursing
15program, up to 5 years if the recipient is enrolled in a
16graduate degree in nursing program, and up to one year if the
17recipient is enrolled in a certificate in practical nursing
18program. At least 40% of the scholarships awarded shall be for
19recipients who are pursuing baccalaureate degrees in nursing,
2030% of the scholarships awarded shall be for recipients who
21are pursuing associate degrees in nursing or a diploma in
22nursing, 10% of the scholarships awarded shall be for
23recipients who are pursuing a certificate in practical
24nursing, and 20% of the scholarships awarded shall be for
25recipients who are pursuing a graduate degree in nursing.
26 Beginning with the fall term of the 2021-2022 academic

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1year and continuing through the 2024-2025 academic year,
2subject to appropriation from the Hospital Licensure Fund, in
3addition to any other funds available to the Department for
4such 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
10year, the Department shall provide scholarships to individuals
11selected from among those applicants who qualify for
12consideration 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
23exceeds the number of scholarships to be awarded under this
24Section, the Department shall, in consultation with the
25Illinois Nursing Workforce Center Advisory Board, consider the

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1following factors in granting priority in awarding
2scholarships:
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
20Section shall be awarded to recipients at approved
21institutions for a period of up to 3 years.
22 (d) Within 12 months after graduation from a graduate
23degree in nursing program for nurse educators, any recipient
24who accepted a scholarship under this Section shall begin
25meeting the required nurse educator employment obligation. In
26order to defer his or her continuous employment obligation, a

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

SB3865 Engrossed- 139 -LRB102 24242 RJF 33473 b
1failure to fulfill the nurse educator employment obligation
2results from the death or adjudication as incompetent of the
3person holding the scholarship. No claim for repayment may be
4filed against the estate of such a decedent or incompetent.
5 The Department may allow a nurse educator employment
6obligation fulfillment alternative if the nurse educator
7scholarship recipient is unsuccessful in finding work as a
8nurse educator. The Department shall maintain a database of
9all available nurse educator positions in this State.
10 (e) Each person applying for a scholarship under this
11Section must be provided with a copy of this Section at the
12time of application for the benefits of this scholarship.
13 (f) Rulemaking authority to implement this amendatory Act
14of the 96th General Assembly, if any, is conditioned on the
15rules being adopted in accordance with all provisions of the
16Illinois Administrative Procedure Act and all rules and
17procedures of the Joint Committee on Administrative Rules; any
18purported rule not so adopted, for whatever reason, is
19unauthorized.
20(Source: P.A. 100-513, eff. 1-1-18.)
21 Section 85. The Residential Mortgage License Act of 1987
22is amended by changing Section 1-4 as follows:
23 (205 ILCS 635/1-4)
24 Sec. 1-4. Definitions. The following words and phrases

SB3865 Engrossed- 140 -LRB102 24242 RJF 33473 b
1have 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

SB3865 Engrossed- 141 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 142 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 143 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 144 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 147 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 149 -LRB102 24242 RJF 33473 b
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
14terms used in this Act for the efficient and clear
15administration of this Act.
16(Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18;
17100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.)
18 Section 90. The Illinois Insurance Code is amended by
19changing Sections 2, 35A-5, 37, and 58 and the heading of
20Article III.5 and Sections 60a, 60b, 60c, 60d, 60e, 60f, 60g,
2160h, 60i, 60j, 63, 86, 87, 88, 103, 104, and 105 and the
22heading of Article VI and Sections 108, 109, 110, 111, 112,
23113, 113.1, 114, 115, 116, 117, 118, 119, 120, 123, 123.1,
24123.3, 123C-8, 126.1, 126.12, 126.25, 131.13, 132.3, 133, 136,
25141a, 144, 144.1, 146, 148, 154.5, 156, 156.1, 157, 161, 162,

SB3865 Engrossed- 159 -LRB102 24242 RJF 33473 b
1163, 164, 166, 169, 170, 173.1, 179A-5, and 179E-5 and the
2heading of Article XII and Sections 180, 185.1, 188, 188.1,
3197, 201, 223, 241, 292.1, 302.1, 308.1, 309.1, 310.1, 357.29,
4370, 404, 408, 412, 413, 415, 444, 444.1, 445, 448, 451,
5531.09, 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
12District of Columbia and a territory or possession of the
13United States.
14 (d) "Country" or "Foreign Country" includes a state,
15province or political subdivision thereof.
16 (e) "Company" means an insurance or surety company and
17shall be deemed to include a corporation, company,
18partnership, association, society, order, individual or
19aggregation of individuals engaging in or proposing or
20attempting to engage in any kind of insurance or surety
21business, including the exchanging of reciprocal or
22inter-insurance contracts between individuals, partnerships
23and corporations.
24 (f) "Domestic Company" means a company incorporated or
25organized under the laws of this State.

SB3865 Engrossed- 160 -LRB102 24242 RJF 33473 b
1 (g) "Foreign Company" means a company incorporated or
2organized under the laws of any state of the United States
3other than this State.
4 (h) "Non-domestic Alien Company" means a company
5incorporated or organized under the laws of any country other
6than the United States.
7 (i) "Mutual Legal Reserve Life Company" means a mutual
8life company issuing contracts without contingent liability on
9the policyholder.
10 (j) "Assessment Legal Reserve Life Company" means a life
11company issuing contracts providing for contingent liability
12on the policyholder.
13 (k) "Reciprocal" includes Inter-Insurance Exchange.
14 (l) "Person" includes an individual, aggregation of
15individuals, corporation, association and partnership.
16 (m) Personal pronouns include all genders, the singular
17includes the plural and the plural includes the singular.
18 (n) "Policy" means an insurance policy or contract and
19includes certificates of fraternal benefit societies,
20assessment companies, mutual benefit associations, and burial
21societies.
22 (o) "Policyholder" means a holder of an insurance policy
23or contract and includes holders of certificates of fraternal
24benefit societies, assessment companies, mutual benefit
25associations, and burial societies.
26 (p) "Articles of Incorporation" means the basic instrument

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

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

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

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1 "RBC Report" means the risk-based capital report required
2under Section 35A-10.
3 "Receivership" means conservation, rehabilitation, or
4liquidation under Article XIII.
5 "Regulatory action level RBC" means the product of 1.5 and
6the insurer's authorized control level RBC.
7 "Revised RBC Plan" means an RBC Plan rejected by the
8Director and revised by the insurer with or without the
9Director's recommendations.
10 "Total adjusted capital" means the sum of (1) an insurer's
11statutory capital and surplus and (2) any other items that the
12RBC 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
17under this Article shall contain the word "Mutual" and shall
18not be the same as, or deceptively similar to, the name of any
19domestic company, or of any foreign or non-domestic alien
20company 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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1members. Any government or governmental agency, state or
2political subdivision thereof, public or private corporation,
3board, association, estate, trustee or fiduciary in this State
4or elsewhere, may make application, enter into agreements for
5and hold policies or contracts in or with, and be a member of,
6any domestic, foreign or non-domestic alien mutual company
7subject to the provisions of this Code. Any officer,
8representative, trustee, receiver or legal representative of
9any such member or policyholder, shall be recognized as acting
10for or on its behalf for the purpose of such contract or
11membership, but shall not be personally liable upon such
12contract 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
18entry.
19 (1) A non-domestic An alien company may use Illinois as a
20state of entry to transact insurance in the United States by
21obtaining a certificate of authority pursuant to Section 111
22and maintaining in this State a deposit of assets in trust in
23accordance with the provisions of Section 60b.
24 (2) A United States branch of a non-domestic an alien

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1company that uses Illinois as a state of entry to transact
2insurance in the United States shall be considered a domestic
3company, and as such shall be subject to all applicable
4provisions of this Code. Transactions between the United
5States branch and the home office of a non-domestic an alien
6company shall not be subject to the provisions of Section
7131.20 and subsection (1) of Section 131.20a, but remittances
8of profits of the United States branch to the home office of a
9non-domestic an alien company shall be considered dividends
10subject to the requirements of subsection (2) of Section
11131.20a.
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
15assets.
16 (1) A non-domestic An alien company may not use Illinois
17as a state of entry to transact insurance in the United States
18unless it maintains in this State a deposit of assets in trust
19for the benefit of policyholders in the United States, which
20assets shall be its "Trusteed Assets". The United States
21branch of a non-domestic an alien company shall maintain
22Trusteed Assets at least equal to (a) the sum of (i) its
23minimum capital and surplus, and (ii) the amount of its
24liabilities to policyholders, net of reinsurance for which
25credit is allowed pursuant to Article XI, as reflected in its

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1most recent financial statement on file with the Director,
2minus (b) the sum of (i) the amount of all of its general state
3deposits (including all interest accrued and due and payable
4to the holder of the deposit), (ii) the amount of its special
5state deposits (including all interest accrued and due and
6payable to the holder of the deposit), (iii) the amount of its
7reinsurance recoverable on paid losses (where such reinsurance
8is the type for which credit would be allowed pursuant to
9Article XI), (iv) the amounts of its notes and bills
10receivable, taken for premiums; (v) with respect to a company
11authorized to write the kinds of insurance specified in
12Classes 2 and 3 of Section 4 of this Code, the amount of its
13agents' balances and uncollected premiums; and (vi) the amount
14of its funds held by or deposited with reinsureds.
15 (2) Only those assets that qualify as authorized
16investments as provided in Article VIII (and in Sections 131.2
17and 131.3) shall be included in a non-domestic an alien
18company'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.
22Trust agreements governing Trusteed Assets required by Section
2360b shall satisfy the following conditions:
24 (1) Legal title to the Trusteed Assets shall be vested in
25the trustee or trustees, and their successors lawfully

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

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1authorized for investment by Article VIII and at least equal
2in value (as reflected in the most recent financial statement
3on file with the Director) to those being withdrawn, if such
4withdrawal is requested in writing by the non-domestic alien
5company's (i) United States manager or (ii) other United
6States representative pursuant to general or specific written
7authority previously given or delegated by the non-domestic
8alien company's board of directors or other similar governing
9body, and a copy of such authority has been filed with the
10trustee or trustees.
11 (c) For the purpose of making deposits required by law in
12any state for the protection of the non-domestic alien
13company's policyholders in the United States. The trustee or
14trustees shall transfer any assets so withdrawn, and in the
15amount so required to be deposited in the other state,
16directly to the depository required to receive such deposit in
17such other state.
18 (d) For the payment of obligations due from the United
19States branch of the non-domestic alien company to
20policyholders in the United States, provided that no
21withdrawal shall be made that reduces the Trusteed Assets
22below the amount required by Section 60b.
23 (e) For the purpose of withdrawing any amount of the
24Trusteed Assets in excess of the amount required by Section
2560b, as determined by the non-domestic alien company's then
26most current annual statement on file with the Director.

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

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1 (3) "Domestic Company" means a stock or mutual insurer
2incorporated 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
6with Sections 60e through 60i, any non-domestic alien company
7authorized to do business in this State may, with the prior
8written approval of the Director, domesticate its United
9States branch by entering into an agreement in writing with a
10domestic company providing for the acquisition by the domestic
11company of all of the assets and the assumption of all of the
12liabilities of the United States branch.
13 (2) The acquisition of assets and assumption of
14liabilities of the United States branch by the domestic
15company shall be effected by filing with the Director an
16instrument of transfer and assumption in form satisfactory to
17the Director and executed by the non-domestic alien company
18and 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;
22execution. (1) The domestication agreement referred to in
23Section 60f shall be authorized, adopted, approved, signed,
24and acknowledged by the non-domestic alien company in

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1accordance with the laws of the country under which it is
2organized.
3 (2) In the case of a domestic company, the domestication
4agreement shall be approved, adopted, and authorized by its
5board of directors and executed by its president or any vice
6president and attested by its secretary or assistant secretary
7under 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.
11An executed counterpart of the domestication agreement,
12together with certified copies of the corporate proceedings of
13the domestic company and the non-domestic alien company,
14approving, adopting and authorizing the execution of the
15domestication agreement, shall be submitted to the Director
16for approval. The Director shall thereupon consider the
17agreement, and, if the Director finds that the same is in
18accordance with the provisions hereof and that the interests
19of policyholders of the United States branch of the
20non-domestic alien insurer and of the domestic company are not
21materially adversely affected, the Director shall approve the
22domestication agreement and authorize the consummation thereof
23in compliance with the provisions of Section 60i. The Director
24shall approve or disapprove the domestication agreement within
2560 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
4assets and deposits. (1) Upon the filing with the Director of a
5certified copy of the instrument of transfer and assumption
6pursuant to which a domestic company succeeds to the business
7and assets of the United States branch of a non-domestic an
8alien company and assumes all its liabilities, the
9domestication of the United States branch shall be deemed to
10be effective; and thereupon all the rights, franchises, and
11interests of the United States branch in and to every species
12of property, real, personal, and mixed, and things in actions
13thereunder belonging shall be deemed as transferred to and
14vested in the domestic company, and simultaneously therewith
15the domestic company shall be deemed to have assumed all of the
16liabilities of the United States branch. The domestic company
17shall be considered as having the age as the oldest of the 2
18parties to the domestication agreement for purposes of
19complying with the requirements of laws relating to age of
20company.
21 (2) All deposits of the United States branch held by the
22Director, or by state officers or other state regulatory
23agencies pursuant to requirements of state laws, shall be
24deemed to be held as security for the satisfaction by the
25domestic company of all liabilities to policyholders within

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

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1and agents, books and papers thereof, with respect to the
2affairs of such non-domestic alien company in the same manner
3as he may examine officers, agents, books, papers and affairs
4of companies.
5 (3) The funds and assets so held by such trustees shall,
6with the deposits otherwise made by the United States branch
7of the non-domestic alien company in the United States
8together with loans in connection with its policies to
9policyholders, and all other funds and assets held by the
10United States branch of the non-domestic alien company in the
11United States, constitute the assets of the company for the
12purpose of making its financial statements required by this
13Code. For purposes of making financial statements required by
14this Code, the liabilities of a non-domestic an alien company
15shall be limited to only those liabilities incurred in
16connection with its United States business.
17 (4) In applying the risk limitations as provided in
18Section 144 or any limit on premium volume, the Director shall
19calculate such limitations based solely on the non-domestic
20alien company's assets in the United States that, pursuant to
21subsection (3) of this Section, constitute the assets of the
22company for purposes of making its financial statements
23required by this Code and its surplus as regards policyholders
24as reflected in the most recent financial statement on file
25with 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
4contracts are to be exchanged shall include the words
5"Reciprocal" or "Inter-Insurance Exchange" or be supplemented
6by the following words immediately below the name or
7designation under which such contracts are exchanged: "A
8Reciprocal" or "An Inter-Insurance Exchange." Such name or
9designation shall not be the same as or deceptively similar to
10the name or designation adopted by any other domestic company
11or any foreign or non-domestic alien company authorized to
12transact 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
18incorporated and individual unincorporated underwriters
19transacting an insurance business in this State through an
20attorney-in-fact under the name Lloyds or under a Lloyds plan
21of operation. Groups that meet the requirements of subsection
22(3) are referred to in this Code as "Lloyds", and incorporated
23and 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
3this State.
4 "Foreign Lloyds" means a Lloyds having its home office in
5any state of the United States other than this State.
6 "Non-domestic Alien Lloyds" means a Lloyds having its home
7office or principal place of business in any country other
8than the United States.
9 (3) A domestic Lloyds must: (i) be established pursuant to
10a statute or written charter; (ii) provide for governance by a
11board of directors or similar body; and (iii) establish and
12monitor standards of solvency of its underwriters. A foreign
13or non-domestic alien Lloyds must be subject to requirements
14of its state or country of domicile. Those requirements must
15be substantially similar to those required of domestic Lloyds.
16Domestic, foreign, and non-domestic alien Lloyds shall not be
17subject to Section 144 of this Code.
18 (4) All foreign and non-domestic alien entities and
19individuals transacting an insurance business as domestic,
20foreign, or non-domestic alien Lloyds shall notify the
21Director and the Secretary of State under the provisions of
22this Article, shall be regulated exclusively by the Director,
23and shall not be required to obtain a certificate of authority
24from the Secretary of State pursuant to any other law of this
25State so long as they solely transact business as a domestic,
26foreign, or non-domestic alien Lloyds. Upon notification, the

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1Secretary of State may require submission of additional
2information to determine whether a foreign or non-domestic
3alien individual or entity is transacting business solely as a
4domestic, 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
9for any domestic, foreign or non-domestic alien Lloyds to
10transact business in this State unless it has first obtained
11and has in force a certificate of authority issued by the
12Director. All certificates of authority issued under the
13provisions of this Article shall terminate on the thirtieth
14day of June next following the date of issuance and may be
15renewed 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
20transact business under this Article shall not be the same as,
21or deceptively similar to, the name of any domestic company or
22of any foreign or non-domestic alien company authorized to
23transact 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
5business 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
3branches under other or different names or titles.
4 (3) There shall be filed with the Director by the
5attorney-in-fact for such Lloyds, who or which shall be a
6resident person or corporation of this State, at the time of
7filing the annual statement, or more often if required by the
8Director, 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
14any such Lloyds subject to such conditions and requirements as
15may from time to time be imposed by such Lloyds and upon
16meeting the requirements of this Section, such additional
17underwriters who may so join such Lloyds shall be bound by the
18documents on file with the Director in the same manner as
19though they had personally executed the same and shall have
20the same rights, powers and duties as all other underwriters
21of such Lloyds. The attorney-in-fact authorized by the
22underwriters to act for them shall thereafter be the
23attorney-in-fact for such additional underwriters to the
24extent of the power of attorney or other document or
25authorization 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
4by any domestic, foreign or non-domestic alien Lloyds shall
5have printed upon its face and back the name of such Lloyds,
6the name and address of its attorney-in-fact in this State or
7agent for service of process in this State, and in type not
8smaller 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
14business in this State shall file with the Director a duly
15executed instrument whereby such Lloyds shall appoint and
16constitute the Director, his successor or successors in
17office, the true and lawful agent of such Lloyds upon whom all
18lawful process in any action or legal proceeding against such
19Lloyds may be served, and shall agree that any lawful process
20against such Lloyds which may be served upon said agent shall
21be of the same force and validity as if served upon the
22attorney-in-fact, and that the authority thereof shall
23continue in force irrevocably so long as any liability of such
24Lloyds in this State shall remain outstanding.

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1 (2) In any suit instituted against any domestic, foreign
2or non-domestic alien Lloyds transacting business in this
3State, it shall not be necessary to name the underwriters as
4parties defendant, but such Lloyds may be named as the party
5defendant in any such suit and service may be had upon all the
6underwriters by service upon the last appointed
7attorney-in-fact or by service upon the Director, and not
8otherwise. Any such suit may be brought in the county in which
9the cause of action arises or in which the claimant resides.
10When such process is served upon the Director as agent to
11accept service, duplicate copies of such process shall be
12delivered to him and he shall immediately forward one copy of
13each such process to the last appointed attorney-in-fact by
14certified or registered mail, postage prepaid, giving the day
15and 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
24foreign or non-domestic alien company organized as a stock

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1company, mutual company, reciprocal, Lloyds or fraternal
2benefit society may be admitted to transact in this State the
3kind or kinds of business which a domestic company similarly
4organized may be authorized to transact under this Code. Any
5certificate of authority issued to a non-domestic an alien
6Lloyds shall be subject to all of the provisions of Section
7103.
8 (2) No foreign or non-domestic alien mutual benefit
9society or burial society shall hereafter be admitted to
10transact business in this State.
11 (3) No foreign or non-domestic alien company shall
12transact in this State any insurance business not classified
13under 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
19procure a certificate of authority to transact business in
20this State shall make application therefor to the Director.
21The 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
3furnished by the Director and shall be executed by the company
4by its president or a vice-president or executive officer
5corresponding thereto, and verified by such officer, and if a
6corporation, the corporate seal shall be thereto affixed,
7attested 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
12documents. 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
23authority.
24 (1) Before a certificate of authority to transact business
25in this State is issued to a foreign or non-domestic alien

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1company, 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
18complies with the provisions of subsection (1) of this section
19the Director shall consider only business transacted in the
20United States, only the assets described in Section 60j and
21only liabilities in connection with its United States
22business.
23 (3) Before a certificate of authority is issued to a
24foreign or non-domestic alien company, other than a Lloyds, it
25shall deposit with the Director securities which are
26authorized investments for similar domestic companies under

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1Section 126.11A(1), 126.11A(2), 126.24A(1), or 126.24A(2) of
2the amount, if any, required of a domestic company similarly
3organized and doing the same kind or kinds of business; or in
4lieu of such deposit such foreign or non-domestic alien
5company shall satisfy the Director that it has on deposit with
6an official of a state of the United States or a depositary
7designated or authorized for such purpose by such official,
8authorized by the law of such state to accept such deposit,
9securities of at least a like amount, for the benefit and
10security of all creditors, policyholders and policy
11obligations of such company.
12 (4) Before issuing a certificate of authority to a foreign
13or non-domestic alien company, the Director may cause an
14examination to be made of the condition and affairs of such
15company.
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
21to transact business in this State shall file with the
22Director a duly executed instrument whereby the company shall
23appoint and constitute the Director and his successor or
24successors in office the true and lawful attorney of such
25company upon whom all lawful process in any action or legal

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1proceeding against it may be served and shall agree that any
2such lawful process against it which may be served upon its
3said attorney as provided in this section shall be of the same
4force and validity as if served upon the company and that the
5authority thereof shall continue in force irrevocably so long
6as any liability of the company in the State shall remain
7outstanding.
8 (2) Process authorized by such instrument or by any
9similar instrument heretofore executed shall be served by
10delivering to and leaving with the Director duplicate copies
11of such process with payment of the fee prescribed by this
12Code, and the service thereof upon such attorney shall be
13deemed service upon the company. The Director shall forthwith
14forward one copy of each such process by certified or
15registered mail prepaid to the company, or in the case of a
16non-domestic an alien company, to the United States Manager or
17last appointed United States general agent of the company,
18giving the day and the hour of such service. Service of such
19process shall not be complete until the copy thereof has been
20so mailed and received by the company, and the certified
21receipt or registry receipt shall be prima facie evidence of
22the completion of such service. Service of process on a
23reciprocal or Lloyds shall be governed by sections 77 and 105
24respectively.
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
4foreign or non-domestic alien company has complied with the
5requirements of this Article and all other requirements
6imposed on such company by existing laws and has paid the
7taxes, fees and charges imposed by law, and the operational
8history of the company when reviewed in conjunction with its
9loss experience, the kinds and nature of risks insured, the
10financial condition of the company and its ownership and the
11ratio of annual premium volume to incurred acquisition
12expenses and to its policyholders' surplus indicates a
13condition such that the expanded operation of the company in
14this State will not create a condition which might be
15hazardous to its policyholders, creditors or the general
16public, the Director must file in his office the documents
17delivered to him and must issue to the company a certificate of
18authority to transact in this State the kind or kinds of
19business specified therein. Such certificate shall expire on
20the 30th day of June of the calendar year succeeding the
21calendar 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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1authority.
2 (1) No foreign or non-domestic alien company which accepts
3a certificate of authority or renewal certificate of authority
4to transact in this State any insurance business as described
5in Section 4 of this Code shall transfer by sale,
6contribution, merger, consolidation, reinsurance or otherwise,
7its direct policy obligations under insurance contracts with
8Illinois 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
2this Section shall be construed as a violation of all
3applicable provisions of Article VII of this Code; including,
4but not limited to, Section 121-4 providing for liability to
5insureds for claims or insured losses not honored by the
6unauthorized insurer.
7 (3) Unless permitted by and obtained in compliance with
8this Section, or specifically authorized by another provision
9of this Code, it shall be unlawful for any unauthorized
10company to obtain as direct insurer any insurance contracts
11written 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
17of authority of a foreign or non-domestic alien company on the
18first day of July of the calendar year following the calendar
19year in which it is admitted to transact business in this State
20and annually thereafter, without application by the company,
21upon payment of the annual privilege tax imposed by this Code,
22if 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
8shall give notice of his intention to refuse to renew the
9certificate of authority of a foreign or non-domestic alien
10company and the grounds therefor at least twenty days before
11the end of the term for which the existing certificate was
12issued, and, the company shall be given an opportunity for a
13hearing before the end of such term.
14 (3) In the event that a company admitted to transact
15business in this State prior to the effective date of this Code
16has been and is transacting in this State or in any other state
17or country the kind or kinds of business enumerated in Class 1
18of Section 4 and in addition thereto any of the kinds of
19business not enumerated in such class, the Director may for a
20period of three years renew annually its certificate of
21authority to transact such kinds of business. At the end of
22such three year period or at the end of any extended period as
23herein provided for, the Director may extend the period during
24which the certificate of authority of such company may be
25renewed annually, upon a showing by the company at a hearing
26before 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
19company authorized to transact business in this State changes
20its name or desires to transact in this State a kind or kinds
21of business other than those it is then authorized to
22transact, it shall file with the Director an application for
23an amended certificate of authority.
24 (2) Such application shall comply as to form and manner of
25execution with the requirements of this Article for an

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1original application and shall set forth the name of the
2company, the respects in which the company desires its
3certificate of authority amended, and such other information
4as is necessary or appropriate to enable the Director to
5determine whether such an amended certificate of authority
6should be issued.
7 (3) The Director shall issue such amended certificate if
8he 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.
19Whenever the articles of incorporation or articles of
20association of a foreign or non-domestic alien company
21authorized to transact business in this State shall be
22amended, such company shall, within thirty days after the
23effective date of such amendment, file with the Director a
24copy thereof duly authenticated by the proper officer of the
25state or country under the laws of which such company is

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1organized. The filing of such copy shall not of itself enlarge
2the authority of the company in the transaction of business in
3this State, nor authorize such company to transact business in
4this State under any other name than the name set forth in its
5certificate 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
11authorized to transact business in this State shall be the
12surviving company of a statutory merger permitted by the laws
13of the state or country under which it is organized, and such
14merger is not subject to the provisions of Article X; it shall
15forthwith 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
4to procure a new certificate of authority to transact business
5in this State nor an amended certificate unless the name of
6such company be changed thereby or unless the company desires
7to transact in this State a kind or kinds of business other
8than those which it is then authorized to transact.
9 (3) Whenever a foreign or non-domestic alien company
10authorized to transact business in this State shall be a party
11to a statutory merger and such company shall not be the
12surviving company, or if such foreign or non-domestic alien
13company shall be a party to a consolidation, then the
14certificate of authority of such foreign or non-domestic alien
15company shall terminate upon such merger or consolidation, and
16the surviving company, if not previously authorized to
17transact business in this State, or the new company, in the
18case of consolidation, shall be subject to the same
19requirements for admission to transact business in this State
20as 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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1do business in this State may withdraw from this State by
2filing with the Director a statement of withdrawal, signed and
3verified by a president, vice-president or an executive
4officer corresponding thereto, or in the case of a reciprocal
5or 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
17certificate of authority with the Director and payment of any
18taxes or charges that may be due, the Director shall cancel the
19certificate of authority and return the cancelled certificate
20to the company. The authority of the company to transact
21business 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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1authority.
2 (1) The Director may revoke or suspend the certificate of
3authority of a foreign or non-domestic alien company or may by
4order require such insurance company to pay to the people of
5the State of Illinois a penalty in a sum not exceeding $500,
6and upon the failure of such insurance company to pay such
7penalty within 20 days after the mailing of such order,
8postage prepaid, certified or registered, and addressed to the
9last known place of business of such insurance company, unless
10such order is stayed by an order of a court of competent
11jurisdiction, the Director of Insurance may revoke or suspend
12the license of such insurance company for any period of time up
13to, but not exceeding a period of, 2 years whenever he finds
14that 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
13revoke or suspend the certificate of authority of a foreign or
14non-domestic alien company until he has given the company at
15least twenty days' notice of the revocation or suspension and
16of the grounds therefor and has afforded the company an
17opportunity 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
22non-domestic alien company has withdrawn from this State or
23has had its certificate of authority to transact business in
24this State revoked and such company desires to withdraw any
25deposit made in this State pursuant to this Code, the Director

SB3865 Engrossed- 203 -LRB102 24242 RJF 33473 b
1shall upon the application of the company and at its expense,
2give notice of such intention to the insurance commissioner or
3other proper supervisory official of each state or country
4where it appears from information on file with the Director,
5the company is authorized to transact business, and shall
6publish notice of such intention in a newspaper of general
7circulation in this State once a week for four consecutive
8weeks. After such notice and publication the Director shall
9deliver to such company or its assigns the securities so
10deposited when he is satisfied upon examination and
11investigation made by him, or under his authority, and upon
12the oaths of the president and secretary or other chief
13officers of the company that all debts and liabilities of
14every kind due and to become due which the deposit was made to
15secure 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
19or non-domestic alien company.
20 (1) The purpose of this Section is to subject unauthorized
21foreign and non-domestic alien companies to the jurisdiction
22of courts of this State in actions by or on behalf of insureds,
23reinsureds, or beneficiaries under insurance or reinsurance
24contracts. The Legislature declares that it is a subject of
25concern that many residents of this State or corporations

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

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

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

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1such refusal was vexatious and without reasonable cause, the
2court may allow to the plaintiff a reasonable attorney fee and
3include such fee in any judgment that may be rendered in such
4action. Such fee shall not exceed 12-1/2 per cent of the amount
5which the court or jury finds the plaintiff is entitled to
6recover against the insurer, but in no event shall such fee be
7less than $25. Failure of a company to defend any such action
8shall be deemed prima facie evidence that its failure to make
9payment was vexatious and without reasonable cause.
10 (7) No plaintiff shall be entitled to a judgment by
11default under this Section until the expiration of 30 days
12from the date of the filing of the affidavit of compliance.
13 (8) The provisions of this Section shall not apply to any
14action or proceeding against any unauthorized foreign or
15non-domestic alien company arising out of any contract of
16direct 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,
25where such contract of insurance contains a provision
26designating the Director and his or her successor or

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

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

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1his duty to give notice of such fact by certified or registered
2mail to such insurer and to the insurance supervisory official
3of the domiciliary state of such insurer. For the purpose of
4this Section the domiciliary state of a non-domestic an alien
5insurer shall be deemed to be the state of entry or the state
6of the principal office in the United States.
7 (3) If after thirty days following the giving of the
8notice mentioned in subsection (2) such insurer has failed to
9cease making, issuing, or circulating such false
10misrepresentations or causing the same to be made, issued or
11circulated in this State, and if the Director has reason to
12believe that a proceeding by him in respect to such matters
13would be to the interest of the public, and that such insurer
14is issuing or delivering contracts of insurance to residents
15of this State or collecting premiums on such contracts or
16doing any of the acts enumerated in subsection (4), he shall
17take action against such insurer under Article XXVI.
18 (4) (a) Any of the following acts in this State, effected
19by mail or otherwise, by any such unauthorized foreign or
20non-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;
2is equivalent to and shall constitute an appointment by such
3insurer of the Director and his successor or successors in
4office, to be its true and lawful attorney, upon whom may be
5served all statements of charges, notices and lawful process
6in any proceeding instituted in respect to the
7misrepresentations set forth in subsection (2) hereof under
8the provisions of Article XXVI, or in any action, suit or
9proceeding for the recovery of any penalty therein provided,
10and any such act shall be signification of its agreement that
11such service of statement of charges, notices or process is of
12the same legal force and validity as personal service of such
13statement of charges, notices or process in this State, upon
14such insurer.
15 (b) Service of a statement of charges and notices under
16Article XXVI shall be made by any deputy or employee of the
17Department of Insurance delivering to and leaving with the
18Director or some person in apparent charge of his office, two
19copies thereof. Service of process issued by any court in any
20action, suit or proceeding to collect any penalty under
21Article XXVI provided, shall be made by delivering and leaving
22with the Director, or some person in apparent charge of his
23office, two copies thereof. The Director shall forthwith cause
24to be mailed by certified or registered mail one of the copies
25of such statement of charges, notices or process to the
26defendant at its last known principal place of business, and

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

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

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1 Any company officer, director, trustee, agent, or employee
2of such company violating this Section shall be guilty of a
3Class 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
8reorganization.
9 A. The provisions of Article X shall apply to captive
10insurance 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
19company, mutual company, or reciprocal company, authorized or
20which may be authorized to do business in this State, may
21reorganize as a domestic captive insurance company under the
22laws of this State, by complying with the provisions of
23Article XII. Domestic companies are hereby authorized to
24reorganize 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
10interests of insureds by promoting insurer solvency and
11financial strength. This will be accomplished through the
12application of investment standards that facilitate a
13reasonable 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
24investment practices of domestic insurers and United States
25branches of non-domestic alien insurers entered through this

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1State. This Article shall not apply to separate accounts of an
2insurer except to the extent that the provisions of Article
3XIV 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
8that:
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
21under 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
9an insurer's investment in an investment pool, however an
10insurer shall not acquire an investment in an investment pool
11under this Section if, as a result of and after giving effect
12to the investment, the aggregate amount of investments then
13held 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
20under 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
8in 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,
26transactions and between a domestic insurer and an affiliated

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1insurer investment pool shall not be subject to the
2requirements 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
7that:
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
20under 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
8an insurer's investment in an investment pool, however an
9insurer shall not acquire an investment in an investment pool
10under this Section if, as a result of and after giving effect
11to the investment, the aggregate amount of investments then
12held 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
19under 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
7in 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,
25transactions between a domestic insurer and an affiliated
26insurer investment pool shall not be subject to the

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1requirements 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
5which is authorized to do business in this State and which is a
6member of an insurance holding company system must register
7with the Director, except a foreign or non-domestic alien
8company subject to registration requirements and standards
9adopted by statute or regulation in the jurisdiction of its
10domicile which are substantially similar to those contained in
11this section and Sections 131.14 through 131.20a. Any company
12which is subject to registration under this section must
13register within 60 days after the effective date of this
14Article or 15 days after it becomes subject to registration,
15whichever is later, unless the Director for good cause shown
16extends the time for registration, and then within such
17extended time. The Director may require any authorized company
18which is a member of a holding company system which is not
19subject to registration under this section to furnish a copy
20of the registration statement or other information filed by
21such company with the insurance regulatory authority of its
22domiciliary 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
2examinations.
3 (a) The Director or any of his examiners may conduct an
4examination of any company as often as the Director, in his
5sole discretion, deems appropriate, but shall, at a minimum,
6conduct an examination of every insurer authorized or licensed
7in this State not less frequently than once every 5 years. In
8scheduling and determining the nature, scope, and frequency of
9the examinations, the Director shall consider the results of
10financial statement analyses and ratios, changes in management
11or ownership, actuarial opinions, reports of independent
12certified public accountants and other criteria set forth in
13the Examiners' Handbook adopted by the National Association of
14Insurance Commissioners and in effect when the Director
15exercises discretion under this subsection.
16 (b) For purposes of completing an examination of any
17company, the Director may examine or investigate any person,
18or the business of any person, insofar as the examination or
19investigation is, in the sole discretion of the Director,
20necessary or material to the examination of the company.
21 (c) In lieu of an examination of any foreign or
22non-domestic alien insurer authorized or licensed in this
23State, the Director may accept an examination report on the
24company as prepared by the insurance department for the
25company's state of domicile or port-of-entry state until
26January 1, 1994. Thereafter, those reports may only be

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1accepted if (1) the insurance department was at the time of the
2examination accredited under the National Association of
3Insurance Commissioners' Financial Regulation Standards and
4Accreditation Program, (2) the examination is performed under
5the supervision of an accredited insurance department or with
6the participation of one or more examiners who are employed by
7an accredited state insurance department, and who, after a
8review of the examination work papers and report, state under
9oath that the examination was performed in a manner consistent
10with the standards and procedures required by their insurance
11department, or (3) the Director otherwise determines that the
12examination was performed in a manner substantially similar to
13the standards and procedures required by Sections 132.1
14through 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,
19documents, accounts and vouchers in such manner that its
20financial condition, affairs and operations can be ascertained
21and so that its financial statements filed with the Director
22can be readily verified and its compliance with the law
23determined and may cause any or all such books, records,
24documents, accounts and vouchers to be photographed or
25reproduced on film. Any such photographs, microphotographs,

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1optical imaging, or film reproductions of any original books,
2records, documents, accounts and vouchers shall for all
3purposes be considered the same as the originals thereof and a
4transcript, exemplification or certified copy of any such
5photograph, microphotograph, optical imaging, or film
6reproduction shall for all purposes be deemed to be a
7transcript, exemplification or certified copy of the original.
8Any original so reproduced may thereafter be disposed of or
9destroyed if provision is made for preserving and examining
10such reproductions.
11 (2) All such original books, records, documents, accounts
12and vouchers, or such reproductions thereof, of the home
13office of any domestic company or of any principal United
14States office of a foreign or non-domestic alien company
15located in this State shall be preserved and kept available in
16this State for the purpose of examination and until authority
17to destroy or otherwise dispose of such records is secured
18from the Director. Such original records may, however, be kept
19and maintained outside this State if, according to a plan
20adopted by the company's board of directors and approved by
21the Director, it maintains suitable records in lieu thereof.
22Every domestic company shall keep its securities within the
23State 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,
5qualified to administer trusts in this State under the
6Corporate Fiduciary Act and that has an office in this State at
7which the account is maintained, for its securities, a limited
8agency, custodial or depository account, or other type of
9account for the safekeeping of those securities, collecting
10the income from those securities and providing supportive
11accounting services relating to such safekeeping and
12collection, provided, the domestic company maintains full
13investment discretion over those securities. Such a
14corporation in safekeeping such securities shall have all the
15powers, rights, duties and responsibilities as it has for
16holding securities in its fiduciary accounts under the
17Securities in Fiduciary Accounts Act.
18 (4) Any director, officer, agent or employee of any
19company who destroys any such books, records or documents
20without the authority of the Director in violation of this
21section or who fails to keep the books, records, documents,
22accounts and vouchers required by this section shall be guilty
23of 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
4or accredited by this State shall submit to the Director by
5March 1st in each year its financial statement for the year
6ending December 31st immediately preceding in such manner and
7in such form as prescribed by the Director, which shall
8conform substantially to the form of statement adopted by the
9National Association of Insurance Commissioners. Unless the
10Director provides otherwise, the annual statement is to be
11prepared in accordance with the annual statement instructions
12and the Accounting Practices and Procedures Manual adopted by
13the National Association of Insurance Commissioners. The
14Director shall have power to make such modifications and
15additions in this form as he may deem desirable or necessary to
16ascertain the condition and affairs of the company. The
17Director shall have authority to extend the time for filing
18any statement by any company for reasons which he considers
19good and sufficient. In every statement the admitted assets
20shall be shown at the actual values as of the last day of the
21preceding year, in accordance with Section 126.7. The
22statement shall be verified by oaths of the president and
23secretary of the company or, in their absence, by 2 other
24principal officers. In addition, any company may be required
25by the Director, when he considers that action to be necessary
26and appropriate for the protection of policyholders,

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

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

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1Commissioners' Insurance Regulatory Information System are
2confidential and may not be disclosed by the Director.
3 (6) Every property and casualty insurance company doing
4business in this State, unless otherwise exempted by the
5Director, shall annually submit the opinion of an appointed
6actuary entitled "Statement of Actuarial Opinion". This
7opinion shall be filed in accordance with the appropriate
8National Association of Insurance Commissioners Property and
9Casualty 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

SB3865 Engrossed- 243 -LRB102 24242 RJF 33473 b
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
9compensation agreements.
10 (a) As used in this Section, the following terms have the
11following meanings:
12 "Actuary" means a person who is a member in good standing
13of the American Academy of Actuaries.
14 "Gross direct written premium" means direct premium
15including policy and membership fees, net of returns and
16cancellations, and prior to any cessions.
17 "Insurer" means any person duly licensed in this State as
18an insurance company pursuant to Articles II, III, III 1/2,
19IV, V, VI, and XVII of this Code.
20 "Managing general agent" means any person, firm,
21association, or corporation, either separately or together
22with 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),
20the following persons shall not be considered to be managing
21general 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
12arrangement, agreement, or contract having as its purpose the
13actual or constructive retention by the insurer of a fixed
14proportion of the gross premiums, with the balance of the
15premiums, retained actually or constructively by the agent or
16the producer of the business, who assumes to pay therefrom all
17losses, all subordinate commission, loss adjustment expenses,
18and his profit, if any, with other provisions of the
19arrangement, agreement, or contract being auxiliary or
20incidental to that purpose.
21 "Underwrite" means to accept or reject risk on behalf of
22the 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

SB3865 Engrossed- 247 -LRB102 24242 RJF 33473 b
1 Director upon his request.
2 (c) No person, firm, association, or corporation acting in
3the capacity of a managing general agent shall place business
4with an insurer unless there is in force a written contract
5between the parties that sets forth the responsibilities of
6each party, that, if both parties share responsibility for a
7particular function, specifies the division of responsibility,
8and 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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1be the acts of the insurer on whose behalf it is acting. A
2managing general agent may be examined in the same manner as an
3insurer.
4 (f) Retrospective compensation agreements for business
5written under Section 4 of this Code in Illinois and outside of
6Illinois by an insurer domiciled in this State must be filed
7for approval. The standards for approval shall be as set forth
8under Section 141 of this Code.
9 (g) Unless specifically required by the Director, the
10provisions of this Section shall not apply to arrangements
11between a managing general agent not underwriting any risks
12located in Illinois and a foreign insurer domiciled in an NAIC
13accredited state that has adopted legislation substantially
14similar to the NAIC Managing General Agents Model Act. "NAIC
15accredited state" means a state or territory of the United
16States having an insurance regulatory agency that maintains an
17accredited status granted by the National Association of
18Insurance Commissioners.
19 (h) If the Director determines that a managing general
20agent has not materially complied with this Section or any
21regulation or order promulgated hereunder, after notice and
22opportunity to be heard, the Director may order a penalty in an
23amount not exceeding $100,000 for each separate violation and
24may order the revocation or suspension of the producer's
25license. If it is found that because of the material
26noncompliance the insurer has suffered any loss or damage, the

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

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1agents, premiums in an amount equal to or greater than its
2capital and surplus as of the preceding December 31st unless
3the domestic company requests in writing the Director's
4permission to do so and the Director has either approved the
5request or has not disapproved the request within 45 days
6after the Director received the request.
7 No domestic company with less than $5,000,000 of capital
8and surplus may write any business through a managing general
9agent unless the domestic company requests in writing the
10Director's permission to do so and the Director has either
11approved the request or has not disapproved the request within
1245 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
17business enumerated in Classes 2 and 3 of Section 4 in this
18State may expose itself to any loss on any one risk or hazard
19to an amount exceeding 10% of its admitted assets in excess of
20its liabilities excluding, in the case of a stock company, its
21capital stock liability. No portion of any such risk or hazard
22which has been reinsured in a domestic or an approved foreign
23or non-domestic alien company, in accordance with this Code,
24shall be included in determining the limitation of risk
25prescribed herein.

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1 (2) Any company transacting the kind of business
2enumerated in clause (g) of Class 2 of Section 4 may expose
3itself to a risk or hazard in excess of the amount prescribed
4in subsection (1) if it is protected in excess of that amount
5by 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
19execute transportation or warehouse bonds for United States
20Internal Revenue taxes to an amount equal to 50% of its capital
21and surplus. When the penalty of the suretyship obligation
22exceeds the amount of a judgment described therein as appealed
23from and thereby secured, or exceeds the amount of the subject
24matter in controversy or of the estate in the custody of the
25fiduciary for the performance of whose duties it is
26conditioned, the bond may be executed if the actual amount of

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1the judgment or the subject matter in controversy or estate
2not subject to supervision or control of the surety is not in
3excess of such limitation. When the penalty of the suretyship
4obligation executed for the performance of a contract exceeds
5the contract price, the latter shall be taken as the basis for
6estimating the limit of risk within the meaning of this
7Section.
8 (4) Whenever the ratio of the annual premium volume in
9proportion to the policyholder surplus of any company
10transacting the kinds of business authorized in Class 2 and
11Class 3 of Section 4 when reviewed in conjunction with the
12kinds and nature of risks insured, the financial condition of
13the company and its ownership including but not limited to the
14liquidity of assets, relationship of surplus to liabilities
15and adequacy of outstanding loss reserves, creates a condition
16such that the further assumption of risks might be hazardous
17to policyholders, creditors or the general public, then the
18Director may order such company to take one or more of the
19following 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
7domestic, foreign, and non-domestic alien Lloyds.
8 The company may, within 10 days after receipt of an Order
9of the Director under this Section, request that the Director
10hold a hearing to determine whether the Order of the Director
11should be modified in any way. A request for a hearing by a
12company under this Section stays any Order of the Director
13entered under this Section until such time as the Director has
14entered 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
18Companies Prohibited.) (1) Unless allowed by the Director, no
19foreign or non-domestic alien company officer, director,
20trustee, agent, or employee of such company may renew, issue
21or deliver or cause to be renewed, issued or delivered, any
22policy, contract or certificate of insurance in this State,
23nor may any domestic company, officer, director, trustee,
24agent or employee of such company renew, issue or deliver or
25cause to be renewed, issued or delivered, any policy, contract

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

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

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

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

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1a 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,
6any domestic company, except a Lloyds, is hereby authorized
7and empowered to merge or consolidate with any domestic
8company or with any foreign or non-domestic alien company,
9except a Lloyds if the surviving company meets the
10requirements for authorization to engage in the insurance
11business in this state and, if such merger or consolidation is
12authorized by the laws of the state or country under which such
13foreign or non-domestic alien company is incorporated or
14organized.
15 (b) The Director may permit the formation of a domestic
16stock company that is established for the sole purpose of
17merging or consolidating with an existing stock company
18simultaneously with the effectiveness of a division authorized
19by this Code. Upon request of the dividing company, the
20Director may waive the requirements of Section 131.8 of this
21Code. Each domestic stock company formed under this subsection
22shall be deemed to exist before a merger and division under
23this Section becomes effective, but solely for the purpose of
24being a party to such merger and division. The Director shall
25not require that such domestic stock company be licensed to

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1transact insurance business in this state before such merger
2and division. All insurance policies, annuities, or
3reinsurance agreements allocated to such domestic stock
4company shall become the obligation of the domestic stock
5company that survives the merger simultaneously with the
6effectiveness of the merger and division. The plan of merger
7or consolidation shall be deemed to have been authorized and
8approved by such domestic stock company if the dividing
9company authorized and approved such plan. The certificate of
10merger shall state that it was approved by the domestic stock
11company 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.
15Any domestic stock insurance company may adopt a plan of
16exchange of the outstanding stock of its stockholders for the
17consideration herein designated to be paid or provided by a
18corporation which acquires such stock, in the manner provided
19in this Article.
20 The plan of exchange may provide that the acquiring
21corporation, as consideration for the stock of the domestic
22corporation, (1) transfer shares of its stock, or (2) transfer
23other securities issued by it, or (3) pay cash therefor, or (4)
24pay or provide other consideration, or (5) pay or provide any
25combination of the foregoing types of consideration.

SB3865 Engrossed- 266 -LRB102 24242 RJF 33473 b
1 "Acquiring corporation", as used in this Article, means
2any stock insurance corporation incorporated under this Code
3or under prior laws of this State relating to the
4incorporation of domestic insurance corporations; any stock
5corporation incorporated under the "Business Corporation Act
6of 1983" or under prior laws of this State authorizing the
7establishment of business corporations; and any foreign or
8non-domestic alien stock corporation qualified to do business
9in Illinois and registered by the corporation department; and
10any foreign or non-domestic alien stock insurance company
11authorized 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
16authorize any company to engage in any kind of insurance
17business not authorized by its articles of incorporation nor
18to authorize any foreign or non-domestic alien company to
19engage in any kind of insurance business in this State not
20covered by its certificate of authority to do business in this
21State.
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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1exchange by foreign or non-domestic alien company.
2 In the event that a foreign or non-domestic alien company
3is a party to the agreement of merger or consolidation or plan
4of exchange, the agreement or plan shall be executed by the
5proper officers of such foreign or non-domestic alien company
6when they are duly authorized thereto by such action on the
7part of the directors, shareholders, members, or policyholders
8of such foreign or non-domestic alien company as may be
9required by the laws of the domiciliary state or country of
10such 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
14of Exchange and Certificate of Approval.
15 (1) Upon the execution of an agreement of merger or
16consolidation or plan of exchange, there shall be delivered to
17the 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
3substantially the same form, the information required under
4Article VIII 1/2 of this Code.
5 (2) In case the surviving or new company is a domestic
6company, 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;
17he or she shall approve the agreement. The provisions of any
18law with reference to age limits and medical examination shall
19be inoperative in so far as agreements of merger or
20consolidation are concerned. If the agreement of merger or
21consolidation be approved by the Director, he or she shall
22file the affidavits and certificates and one of the duplicate
23originals of the agreement in his or her office, endorse upon
24the other duplicate original his or her approval thereof, and
25deliver it, together with a certificate of merger or
26consolidation, as the case may be, to the surviving or new

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1company. In the case of a consolidation, the Director shall
2also issue a certificate of authority to the new company.
3 (3) In case the surviving or new company is a foreign or
4non-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;
23he or she shall approve the agreement. If the agreement be
24approved by the Director, he or she shall file the affidavits
25and certificates and one of the duplicate originals of the
26agreement in his or her office, endorse upon the other

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1duplicate original his or her approval thereof, and deliver
2it, together with a certificate of approval of the merger or
3consolidation, as the case may be, to the surviving or new
4company.
5 (4) In the case of a plan of exchange, if the Director
6finds 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;
24he or she shall approve the plan of exchange. If the plan of
25exchange be approved by the Director, he or she shall file the
26affidavits and certificates and one of the duplicate originals

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

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

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1mailed to each such stockholder and filed with the Director
2prior 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
6consolidated company from this State.
7 (1) If the surviving or new company shall be a foreign or
8non-domestic alien company, no property of the domestic merged
9or consolidated company shall be removed from this State by
10reason of such merger or consolidation, prior to, nor shall
11title to such property vest in the surviving or new company
12until, the merger or consolidation shall become effective in
13this State as provided in section 163.
14 (2) Any director or officer of any domestic company
15removing or permitting the removal of any property of company
16from this State in violation of this section, shall be guilty
17of 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,
22when such merger or consolidation has been effected
23 (a) the several companies parties to the agreement of
24merger or consolidation shall be a single company, which, in

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

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

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

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

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

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1consist of securities of the kinds authorized for investment
2by 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
8this Code and related provisions of the Illinois
9Administrative Code, credit for reinsurance shall be allowed a
10domestic ceding insurer as either an admitted asset or a
11deduction from liability on account of reinsurance ceded only
12when 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).
14Credit shall be allowed under paragraph (A), (B), or (B-5) of
15this subsection (1) only as respects cessions of those kinds
16or classes of business in which the assuming insurer is
17licensed or otherwise permitted to write or assume in its
18state of domicile, or in the case of a U.S. branch of a
19non-domestic an alien assuming insurer, in the state through
20which it is entered and licensed to transact insurance or
21reinsurance. Credit shall be allowed under paragraph (B-5) or
22(C) of this subsection (1) only if the applicable requirements
23of 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.

SB3865 Engrossed- 283 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 284 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 285 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 287 -LRB102 24242 RJF 33473 b
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'

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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

SB3865 Engrossed- 290 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 291 -LRB102 24242 RJF 33473 b
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;

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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

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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

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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%.

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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

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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

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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

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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

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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

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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

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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

SB3865 Engrossed- 314 -LRB102 24242 RJF 33473 b
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
22to an assuming insurer not meeting the requirements of
23subsection (1) of this Section shall be allowed in an amount
24not exceeding the assets or liabilities carried by the ceding
25insurer. The credit shall not exceed the amount of funds held
26by or held in trust for the ceding insurer under a reinsurance

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1contract with the assuming insurer as security for the payment
2of obligations thereunder, if the security is held in the
3United States subject to withdrawal solely by, and under the
4exclusive control of, the ceding insurer; or, in the case of a
5trust, held in a qualified United States financial
6institution, as defined in paragraph (B) of subsection (3) of
7this 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
9this Section, a "qualified United States financial
10institution" 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"
26means, for purposes of those provisions of this law specifying

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1those institutions that are eligible to act as a fiduciary of a
2trust, 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
18certified reinsurers, this amendatory Act of the 100th General
19Assembly shall apply to all cessions after the effective date
20of this amendatory Act of the 100th General Assembly under
21reinsurance agreements that have an inception, anniversary, or
22renewal date not less than 6 months after the effective date of
23this amendatory Act of the 100th General Assembly.
24 (D) The Department shall adopt rules implementing the
25provisions 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
4this Code and related provisions of the Illinois
5Administrative Code, credit for reinsurance shall be allowed a
6domestic ceding insurer as either an admitted asset or a
7deduction from liability on account of reinsurance ceded only
8when the reinsurer meets the requirements of paragraph (A),
9(B), (B-5), (C), (C-5), (C-10), or (D) of this subsection (1).
10Credit shall be allowed under paragraph (A), (B), or (B-5) of
11this subsection (1) only as respects cessions of those kinds
12or classes of business in which the assuming insurer is
13licensed or otherwise permitted to write or assume in its
14state of domicile, or in the case of a U.S. branch of a
15non-domestic an alien assuming insurer, in the state through
16which it is entered and licensed to transact insurance or
17reinsurance. Credit shall be allowed under paragraph (B-5) or
18(C) of this subsection (1) only if the applicable requirements
19of 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

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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:

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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

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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

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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

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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:

SB3865 Engrossed- 334 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 335 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 336 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 337 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 338 -LRB102 24242 RJF 33473 b
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"

SB3865 Engrossed- 339 -LRB102 24242 RJF 33473 b
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:

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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

SB3865 Engrossed- 353 -LRB102 24242 RJF 33473 b
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.

SB3865 Engrossed- 355 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 356 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 357 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 358 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 359 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 360 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 361 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 362 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 363 -LRB102 24242 RJF 33473 b
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
7to an assuming insurer not meeting the requirements of
8subsection (1) of this Section shall be allowed in an amount
9not exceeding the assets or liabilities carried by the ceding
10insurer. The credit shall not exceed the amount of funds held
11by or held in trust for the ceding insurer under a reinsurance
12contract with the assuming insurer as security for the payment
13of obligations thereunder, if the security is held in the
14United States subject to withdrawal solely by, and under the
15exclusive control of, the ceding insurer; or, in the case of a
16trust, held in a qualified United States financial
17institution, as defined in paragraph (B) of subsection (3) of
18this 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
20this Section, a "qualified United States financial
21institution" 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"
11means, for purposes of those provisions of this law specifying
12those institutions that are eligible to act as a fiduciary of a
13trust, 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
3certified reinsurers, this amendatory Act of the 100th General
4Assembly shall apply to all cessions after the effective date
5of this amendatory Act of the 100th General Assembly under
6reinsurance agreements that have an inception, anniversary, or
7renewal date not less than 6 months after the effective date of
8this amendatory Act of the 100th General Assembly.
9 (D) The Department shall adopt rules implementing the
10provisions of this Article.
11(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A.
12102-672 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
15basis for the creation of protected cells by a domestic
16insurer as one means of accessing alternative sources of
17capital and achieving the benefits of insurance
18securitization. Investors in fully funded insurance
19securitization transactions provide funds that are available
20to pay the insurer's insurance obligations or to repay the
21investors or both. The creation of protected cells is intended
22to be a means to achieve more efficiencies in conducting
23insurance securitizations.
24 Under the terms of the typical debt instrument underlying
25an insurance securitization transaction, prepaid principal is

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

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1triggering event. The creation of SPRVs is intended to achieve
2greater efficiencies in conducting insurance securitizations,
3to diversify and broaden insurers' access to sources of risk
4bearing capital, and to make insurance securitization
5generally available on reasonable terms to as many U.S.
6insurers as possible.
7 Under the terms of the typical securities underlying an
8insurance securitization transaction, proceeds from the
9issuance of securities are repaid to the investor on a
10specified maturity date with interest or dividends unless a
11triggering event occurs. The insurance securitization proceeds
12are available to pay the SPRV's obligations to the ceding
13insurer if the triggering event occurs, as well as being
14available to satisfy the SPRV's obligation to repay the
15insurance securitization investors if a triggering event does
16not occur. Insurance securitization transactions have been
17performed by non-domestic alien companies to utilize
18efficiencies available to those non-domestic alien companies
19that are not currently available to domestic companies. This
20Article is adopted to allow more efficiency in conducting
21insurance securitizations, to allow ceding insurers easier
22access to alternative sources of risk bearing capital, and to
23promote the benefits of insurance securitization to U.S.
24insurers.
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
7company, mutual company, assessment legal reserve company,
8reciprocal, or fraternal benefit society, authorized or which
9may be authorized to do business in this State, may reorganize
10under the laws of this State (including a reorganization as a
11captive insurance company under the laws of this State), by
12complying with the provisions of this Article.
13 (2) As used in this Article: "reorganize" means
14reorganize, reincorporate, or domesticate as an Illinois
15insurer; "reorganization" means reorganization,
16reincorporation, or domestication as an Illinois insurer;
17"reorganized company" means any company that has availed
18itself of the provisions of this Article, and the
19reorganization of which has been effected as in this Article
20provided; and "similar domestic company" means, in the case of
21an application for reorganization as a domestic captive
22insurance company, a domestic captive insurance company
23organized 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
5of incorporation of the reorganized company and said company
6shall continue in existence as, and thereafter be, a company
7of this State.
8 (b) The reorganized company shall make its reports in
9accordance with the laws of this State and shall be subject to
10the exclusive regulation and supervision by the Department of
11Insurance of this State and shall be subject to regulation and
12supervision by the Insurance Departments of other states and
13countries as a foreign or non-domestic alien company.
14 (c) The reorganized company shall have all of the rights,
15privileges, immunities and powers and shall be subject to all
16of the duties and liabilities granted or imposed by this Code
17(except in the case of a domestic captive insurance company,
18which shall have all of the rights, privileges, immunities and
19powers and shall be subject to all of the duties and
20liabilities granted or imposed by Article VIIC of this Code).
21 (d) The reorganized company shall thereupon and thereafter
22possess all the rights, privileges, immunities, powers and
23franchises of a public as well as a private nature,
24theretofore possessed by the company so reorganized. Without
25limiting the generality of the foregoing, (i) the agency
26appointments, licenses, certificates of authority and rates

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1which are in existence at the time of the reorganization of
2such reorganized company takes effect shall continue in full
3force and effect; (ii) all property, real, personal and mixed,
4and all debts due on whatever account, including subscriptions
5to shares, assessments payable from members or policyholders,
6and all other choses in action, and all and every other
7interest of, or belonging to or due to the company so
8reorganized, shall be deemed to be transferred to and vested
9in the reorganized company without further act or deed; and
10(iii) the title to any real estate or any interest therein
11theretofore vested in the company so reorganized, shall not
12revert or be in any way impaired by reason of such
13reorganization.
14 (e) The reorganized company shall thenceforth be
15responsible and liable for all the liabilities and obligations
16of the company so reorganized. Any claim existing, or action
17or proceeding pending by or against the company so
18reorganized, may be prosecuted to judgment as if such
19reorganization had not taken place, or such reorganized
20company may be substituted in its place. Neither the rights of
21creditors nor any liens upon the property of the company so
22reorganized, shall be impaired by such reorganization, but
23such liens shall be limited to the property upon which they
24were liens immediately prior to the reorganization, unless
25otherwise 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
3domestic company or an unauthorized foreign or non-domestic
4alien company. Whenever any domestic company or any
5unauthorized 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,
23sufficient grounds shall be deemed to exist for the
24commencement of rehabilitation or liquidation proceedings.
25 With respect to a domestic company, the Director must
26report, and with respect to an unauthorized foreign or

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

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1general 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
5domestic, foreign, or non-domestic alien company.
6 (1) Upon the filing by the Director of a verified
7complaint alleging (a) that with respect to a domestic,
8foreign, or non-domestic alien company, whether authorized or
9unauthorized, a condition exists that would justify a court
10order for proceedings under Section 188, and (b) that the
11interests of creditors, policyholders or the public will
12probably be endangered by delay, then the circuit court of
13Sangamon or Cook County or the circuit court of the county in
14which such company has or last had its principal office shall
15enter forthwith without a hearing or prior notice an order
16directing the director to take possession and control of the
17property, business, books, records, and accounts of the
18company, and of the premises occupied by it for the
19transaction of its business, or such part of each as the
20complaint shall specify, and enjoining the company and its
21officers, directors, agents, servants, and employees from
22disposition of its property and from transaction of its
23business except with the concurrence of the Director until the
24further order of the court. Copies of the verified complaint
25and 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
2time as the court deems necessary for the Director to
3ascertain the condition and situation of the company. On
4motion of either party or on its own motion, the court may from
5time to time hold such hearings as it deems desirable, and may
6extend, shorten, or modify the terms of, the seizure order. So
7far as the court deems it possible, the parties shall be given
8adequate notice of such hearings. As soon as practicable, the
9court shall vacate the seizure order or terminate the
10conservation proceedings of the company, either when the
11Director has failed to institute proceedings under Section 188
12having a reasonable opportunity to do so, or upon an order of
13the court pursuant to such proceedings.
14 (3) Entry of a seizure order under this section shall not
15constitute an anticipatory breach of any contract of the
16company.
17 (4) The court may hold all hearings in conservation
18proceedings privately in chambers, and shall do so on request
19of any officer of the company proceeded against.
20 (5) In conservation proceedings and judicial reviews
21thereof, all records of the company, other documents, and all
22insurance department files and court records and papers, so
23far as they pertain to and are a part of the record of the
24conservation proceedings, shall be and remain confidential
25except as is necessary to obtain compliance therewith, unless
26and until the court, after hearing arguments in chambers from

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1the Director and the company, shall decide otherwise, or
2unless the company requests that the matter be made public.
3 (6) Any person having possession of and refusing to
4deliver any of the property, business, books, records or
5accounts of a company against which a seizure order has been
6issued 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
10domiciliary proceeding.
11 The rights, powers, and duties of the Director as
12conservator, rehabilitator, or liquidator, with reference to
13the assets of a foreign or non-domestic alien company, whether
14authorized or unauthorized, shall be ancillary to the rights,
15powers and duties imposed upon any receiver or other person,
16if any, in charge of the property, business and affairs of such
17company 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
21liquidator.) No order or judgment enjoining, restraining or
22interfering with the prosecution of the business of any
23company, or for the appointment of a temporary or permanent
24receiver, rehabilitator or liquidator of a domestic company,

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

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

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1this Section shall apply to all policies and contracts issued
2on or after the operative date of the Valuation Manual.
3 Any such company which adopts at any time a standard of
4valuation producing greater aggregate reserves than those
5calculated according to the minimum standard provided under
6this Section may adopt a lower standard of valuation, with the
7approval of the Director, but not lower than the minimum
8herein provided, however, that, for the purposes of this
9subsection, the holding of additional reserves previously
10determined by the appointed actuary to be necessary to render
11the opinion required by subsection (1a) shall not be deemed to
12be the adoption of a higher standard of valuation. In the
13valuation of policies the Director shall give no consideration
14to, nor make any deduction because of, the existence or the
15possession 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
4the first full calendar year following the effective date of
5this 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
9Date 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

SB3865 Engrossed- 387 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 388 -LRB102 24242 RJF 33473 b
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
9contracts 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

SB3865 Engrossed- 390 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 391 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 392 -LRB102 24242 RJF 33473 b
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
12contracts issued on or after January 1, 1948 or such earlier
13operative date of Section 229.2 (the Standard Non-forfeiture
14Law) as shall have been elected by the insurance company
15issuing 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

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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

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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

SB3865 Engrossed- 396 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 399 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 400 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 402 -LRB102 24242 RJF 33473 b
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
14standard of valuation for individual annuity and pure
15endowment contracts issued on or after the operative date of
16this subsection, as defined herein, and for all annuities and
17pure endowments purchased on or after such operative date
18under group annuity and pure endowment contracts shall be the
19Commissioners Reserve valuation methods defined in paragraph
20(b) of subsection (3) and subsection (5) and the following
21tables 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
2Director a written notice of its election to comply with the
3provisions of this subsection after a specified date before
4January 1, 1979, which shall be the operative date of this
5subsection for such company; provided, a company may elect a
6different operative date for individual annuity and pure
7endowment contracts from that elected for group annuity and
8pure endowment contracts. If a company makes no election, the
9operative date of this subsection for such company shall be
10January 1, 1979.
11 (5) This subsection shall apply to all annuity and pure
12endowment contracts other than group annuity and pure
13endowment contracts purchased under a retirement plan or plan
14of deferred compensation, established or maintained by an
15employer (including a partnership or sole proprietorship) or
16by an employee organization, or by both, other than a plan
17providing individual retirement accounts or individual
18retirement annuities under Section 408 of the Internal Revenue
19Code, as now or hereafter amended.
20 Reserves according to the Commissioners annuity reserve
21method for benefits under annuity or pure endowment contracts,
22excluding any disability and accidental death benefits in such
23contracts, shall be the greatest of the respective excesses of
24the present values, at the date of valuation, of the future
25guaranteed benefits, including guaranteed nonforfeiture
26benefits, provided for by such contracts at the end of each

SB3865 Engrossed- 406 -LRB102 24242 RJF 33473 b
1respective contract year, over the present value, at the date
2of valuation, of any future valuation considerations derived
3from future gross considerations, required by the terms of
4such contract, that become payable prior to the end of such
5respective contract year. The future guaranteed benefits shall
6be determined by using the mortality table, if any, and the
7interest rate, or rates, specified in such contracts for
8determining guaranteed benefits. The valuation considerations
9are the portions of the respective gross considerations
10applied under the terms of such contracts to determine
11nonforfeiture values.
12 (6)(a) Applicability of this subsection. The interest
13rates used in determining the minimum standard for the
14valuation 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
3shall be the calendar year statutory valuation interest rates,
4as 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.

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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

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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.
18GuaranteeWeighting
19DurationFactors
20(Years)
2110 or less.50
22More than 10, but not more than 20.45
23More 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.
20GuaranteeWeighting Factor
21Durationfor Plan Type
22(Years) A B C
235 or less......................................80 .60 .50
24More than 5, but not
25more than 10...................................75 .60 .50
26More than 10, but not

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1more than 20...................................65 .50 .45
2More 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

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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,

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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

SB3865 Engrossed- 417 -LRB102 24242 RJF 33473 b
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,
24Accident and Sickness) Insurance Contracts. The Director shall
25promulgate a regulation containing the minimum standards
26applicable to the valuation of health (disability, sickness

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1and accident) plans which are issued prior to the operative
2date of the Valuation Manual. For accident and health
3(disability, accident and sickness) insurance contracts issued
4on or after the operative date of the Valuation Manual, the
5standard prescribed in the Valuation Manual is the minimum
6standard of valuation required under subsection (1).
7 (8) Valuation Manual for Policies Issued On or After the
8Operative 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:

SB3865 Engrossed- 420 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 421 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 422 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 423 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 424 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 425 -LRB102 24242 RJF 33473 b
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
14After the Operative Date of the Valuation Manual. A company
15shall submit mortality, morbidity, policyholder behavior, or
16expense experience and other data as prescribed in the
17Valuation 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

SB3865 Engrossed- 426 -LRB102 24242 RJF 33473 b
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;

SB3865 Engrossed- 428 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 431 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 432 -LRB102 24242 RJF 33473 b
1following definitions shall apply beginning on the operative
2date of the Valuation Manual:
3 "Accident and health insurance" means contracts that
4incorporate morbidity risk and provide protection against
5economic loss resulting from accident, sickness, or medical
6conditions and as may be specified in the Valuation Manual.
7 "Appointed actuary" means a qualified actuary who is
8appointed in accordance with the Valuation Manual to prepare
9the actuarial opinion required in paragraph (b) of subsection
10(1) of this Section.
11 "Company" means an entity that (a) has written, issued, or
12reinsured life insurance contracts, accident and health
13insurance contracts, or deposit-type contracts in this State
14and has at least one such policy in force or on claim or (b)
15has written, issued, or reinsured life insurance contracts,
16accident and health insurance contracts, or deposit-type
17contracts in any state and is required to hold a certificate of
18authority to write life insurance, accident and health
19insurance, or deposit-type contracts in this State.
20 "Deposit-type contract" means contracts that do not
21incorporate mortality or morbidity risks and as may be
22specified in the Valuation Manual.
23 "Life insurance" means contracts that incorporate
24mortality risk, including annuity and pure endowment
25contracts, and as may be specified in the Valuation Manual.
26 "NAIC" means the National Association of Insurance

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

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1or 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
6proceeds of any policy issued by it under a trust or other
7agreement upon such terms and restrictions as to revocation by
8the policyholder and control by beneficiaries, and with such
9exemptions from the claims of creditors of beneficiaries other
10than the policyholder as shall have been agreed to in writing
11by such company and the policyholder. Upon maturity of a
12policy in the event the policyholder has made no such
13agreement, the company shall have power to hold the proceeds
14of the policy under an agreement with the beneficiaries. Such
15company shall not be required to segregate funds so held but
16may hold them as part of its general company assets. A foreign
17or non-domestic alien company, when authorized by its charter
18or the laws of its domicile, may exercise any such powers in
19this 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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1with the provisions thereof by action of its supreme governing
2body at any regular or special meeting thereof or, if its laws
3so provide, by referendum. Such referendum may be held in
4accordance with the provisions of its laws by the vote of the
5voting members of the society, by the vote of delegates or
6representatives of voting members or by the vote of local
7lodges. A society may provide for voting by mail. No amendment
8submitted for adoption by referendum shall be adopted unless,
9within 6 months from the date of submission thereof, a
10majority of the members voting shall have signified their
11consent to such amendment by one of the methods herein
12specified.
13 (b) No amendment to the laws of any domestic society shall
14take effect unless approved by the Director, who shall approve
15such amendment if the Director finds that it has been duly
16adopted and is not inconsistent with any requirement of the
17laws of this State or with the character, objects and purposes
18of the society. Unless the Director shall disapprove any such
19amendment within 60 days after the filing of same, such
20amendment shall be considered approved. The approval or
21disapproval of the Director shall be in writing and mailed to
22the society. In case the Director disapproves such amendment,
23the reasons therefor shall be stated in such written notice.
24 (c) Within 90 days from the approval thereof by the
25Director, all such amendments, or a synopsis thereof, shall be
26furnished to all members of the society either by mail or by

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

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1to meet the requirements of this Section for the investment of
2funds. Admitted assets in addition to investments authorized
3by this Section and Article VIII and Article VIII 1/2 of this
4Code 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
9publications.
10 (a) The Director, or any person he or she may appoint, may
11examine any domestic, foreign or non-domestic alien society
12transacting or applying for admission to transact business in
13this State in the same manner as authorized for examination of
14domestic, foreign or non-domestic alien insurance companies.
15Requirements of notice and an opportunity to respond before
16findings are made public as provided in the laws regulating
17insurance companies shall also be applicable to the
18examination of societies.
19 (b) The expense of each examination and of each valuation,
20including compensation and actual expense of examiners, shall
21be paid by the society examined or whose certificates are
22valued, 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 -
3admission. No foreign or non-domestic alien society shall
4transact business in this State without a certificate of
5authority issued by the Director in accordance with Article VI
6of this Code. Any such society desiring admission to this
7State shall comply substantially with the requirements and
8limitations of this amendatory Act applicable to domestic
9societies.
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
14certificate of authority.
15 (a) Domestic Societies. When, upon investigation, the
16Director is satisfied that any domestic society transacting
17business under this amendatory Act has exceeded its powers or
18has failed to comply with any provisions of this amendatory
19Act or is conducting business fraudulently or in a way
20hazardous to its members, creditors or the public or is not
21carrying out its contracts in good faith, the Director shall
22notify the society of his or her findings, stating in writing
23the grounds of his or her dissatisfaction, and, after
24reasonable notice, require the society on a date named to show
25cause why its certificate of authority should not be revoked

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1or suspended or why such society should not be fined as
2hereinafter provided or why the Director should not proceed
3against the society under Article XIII of this Code. If, on the
4date named in said notice, such objections have not been
5removed to the satisfaction of the Director or if the society
6does not present good and sufficient reasons why its authority
7to transact business in this State should not at that time be
8revoked or suspended or why such society should not be fined as
9hereinafter provided, the Director may revoke the authority of
10the society to continue business in this State and proceed
11against the society under Article XIII of this Code or suspend
12such certificate of authority for any period of time up to, but
13not to exceed, 2 years; or may by order require such society to
14pay to the people of the State of Illinois a penalty in a sum
15not exceeding $10,000, and, upon the failure of such society
16to pay such penalty within 20 days after the mailing of such
17order, postage prepaid, registered and addressed to the last
18known place of business of such society, unless such order is
19stayed by an order of a court of competent jurisdiction, the
20Director may revoke or suspend the license of such society for
21any period of time up to, but not exceeding, a period of 2
22years.
23 (b) Foreign or non-domestic alien societies. The Director
24shall suspend, revoke or refuse to renew certificates of
25authority 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
3company, when delivered or issued for delivery to any person
4in this State, may contain any provision which is not less
5favorable to the insured or the beneficiary than the
6provisions of this article and which is prescribed or required
7by the law of the state under which the company is organized.
8 Any policy of a domestic company may, when issued for
9delivery in any other state or country, contain any provision
10permitted or required by the laws of such other state or
11country.
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
16or delivering to any person in this State any policy in wilful
17violation of the provision of this article shall be guilty of a
18petty offense.
19 (2) The Director may revoke the license of any foreign or
20non-domestic alien company, or of the agent thereof wilfully
21violating any provision of this article or suspend such
22license for any period of time up to, but not to exceed, two
23years; or may by order require such insurance company or agent
24to pay to the people of the State of Illinois a penalty in a

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

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

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

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1are destroyed or otherwise disposed of pursuant to the
2provisions of this section, the Director shall execute and
3file in a separate, permanent office file a certificate
4listing and setting forth by summary description the records,
5papers, documents or memoranda so destroyed or otherwise
6disposed of, and the Director may, in his discretion, preserve
7copies of any such records, papers, documents or memoranda by
8means of microfilming or photographing the same.
9 (8) This Section shall apply to records, papers,
10documents, and memoranda presently in the possession of the
11Director as well as to records, papers, documents, and
12memoranda 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
17acquittances for the payment of the following fees and
18charges:
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
3paper or records are furnished or certified, the Director may
4reduce such fees for copies if he finds them excessive. He may,
5when he considers it in the public interest, furnish without
6charge to state insurance departments and persons other than
7companies, copies or certified copies of reports of
8examinations and of other papers and records.
9 (3) The expenses incurred in any performance examination
10authorized by law shall be paid by the company or person being
11examined. The charge shall be reasonably related to the cost
12of the examination including but not limited to compensation
13of examiners, electronic data processing costs, supervision
14and preparation of an examination report and lodging and
15travel expenses. All lodging and travel expenses shall be in
16accord with the applicable travel regulations as published by
17the Department of Central Management Services and approved by
18the Governor's Travel Control Board, except that out-of-state
19lodging and travel expenses related to examinations authorized
20under Section 132 shall be in accordance with travel rates
21prescribed under paragraph 301-7.2 of the Federal Travel
22Regulations, 41 C.F.R. 301-7.2, for reimbursement of
23subsistence expenses incurred during official travel. All
24lodging and travel expenses may be reimbursed directly upon
25authorization of the Director. With the exception of the
26direct reimbursements authorized by the Director, all

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

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

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1State of Illinois and companies doing an insurance business in
2this State pursuant to Article X of the Interstate Insurance
3Receivership Compact. The fee shall be the greater fixed
4amount based upon the combination of nationwide direct premium
5income and nationwide reinsurance assumed premium income or
6upon admitted assets calculated under this subsection as
7follows:
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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1financial regulation fee from every foreign or non-domestic
2alien company, except fraternal benefit societies, for the
3examination and analysis of its financial condition and to
4fund the internal costs and expenses of the Interstate
5Insurance Receivership Commission as may be allocated to the
6State of Illinois and companies doing an insurance business in
7this State pursuant to Article X of the Interstate Insurance
8Receivership Compact. The fee shall be a fixed amount based
9upon Illinois direct premium income and nationwide reinsurance
10assumed premium income in accordance with the following
11schedule:
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
5within the same affiliated group shall not exceed $250,000 in
6the aggregate in any single year and shall be billed by the
7Director to the member company designated by the group.
8 (8) Beginning January 1, 1992, the financial regulation
9fees imposed under subsections (6) and (7) of this Section
10shall be paid by each company or domestic affiliated group
11annually. After January 1, 1994, the fee shall be billed by
12Department invoice based upon the company's premium income or
13admitted assets as shown in its annual statement for the
14preceding calendar year. The invoice is due upon receipt and
15must be paid no later than June 30 of each calendar year. All
16financial regulation fees collected by the Department shall be
17paid to the Insurance Financial Regulation Fund. The
18Department may not collect financial examiner per diem charges
19from companies subject to subsections (6) and (7) of this
20Section undergoing financial examination after June 30, 1992.
21 (9) In addition to the financial regulation fee required
22by this Section, a company undergoing any financial
23examination authorized by law shall pay the following costs
24and expenses incurred by the Department: electronic data
25processing costs, the expenses authorized under Section 131.21
26and subsection (d) of Section 132.4 of this Code, and lodging

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

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1but not limited to, compensation of examiners and other costs
2described in this subsection.
3 (10) Any company, person, or entity failing to make any
4payment of $150 or more as required under this Section shall be
5subject to the penalty and interest provisions provided for in
6subsections (4) and (7) of Section 412.
7 (11) Unless otherwise specified, all of the fees collected
8under this Section shall be paid into the Insurance Financial
9Regulation 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

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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
22Director that because of some mistake of fact, error in
23calculation, or erroneous interpretation of a statute of this
24or any other state, any authorized company, surplus line
25producer, or industrial insured has paid to him, pursuant to

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

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1 (b) Beginning January 1, 2000 and thereafter, the
2Department shall deposit a percentage of the amounts collected
3under Sections 409, 444, and 444.1 of this Code into the
4Insurance Premium Tax Refund Fund. The percentage deposited
5into the Insurance Premium Tax Refund Fund shall be the annual
6percentage. The annual percentage shall be calculated as a
7fraction, the numerator of which shall be the amount of cash
8refunds approved by the Director for payment and paid during
9the preceding calendar year as a result of overpayment of tax
10liability under Sections 121-2.08, 409, 444, 444.1, and 445 of
11this Code and the denominator of which shall be the amounts
12collected pursuant to Sections 121-2.08, 409, 444, 444.1, and
13445 of this Code during the preceding calendar year. However,
14if there were no cash refunds paid in a preceding calendar
15year, the Department shall deposit 5% of the amount collected
16in that preceding calendar year pursuant to Sections 121-2.08,
17409, 444, 444.1, and 445 of this Code into the Insurance
18Premium Tax Refund Fund instead of an amount calculated by
19using the annual percentage.
20 (c) Beginning July 1, 1999, moneys in the Insurance
21Premium Tax Refund Fund shall be expended exclusively for the
22purpose of paying cash refunds resulting from overpayment of
23tax liability under Sections 121-2.08, 409, 444, 444.1, and
24445 of this Code as determined by the Director pursuant to
25subsection 1(a) of this Section. Cash refunds made in
26accordance with this Section may be made from the Insurance

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1Premium Tax Refund Fund only to the extent that amounts have
2been deposited and retained in the Insurance Premium Tax
3Refund Fund.
4 (d) This Section shall constitute an irrevocable and
5continuing appropriation from the Insurance Premium Tax Refund
6Fund for the purpose of paying cash refunds pursuant to the
7provisions of this Section.
8 (2)(a) When any insurance company fails to file any tax
9return required under Sections 408.1, 409, 444, and 444.1 of
10this Code or Section 12 of the Fire Investigation Act on the
11date prescribed, including any extensions, there shall be
12added as a penalty $400 or 10% of the amount of such tax,
13whichever is greater, for each month or part of a month of
14failure to file, the entire penalty not to exceed $2,000 or 50%
15of the tax due, whichever is greater.
16 (b) When any industrial insured or surplus line producer
17fails to file any tax return or report required under Sections
18121-2.08 and 445 of this Code or Section 12 of the Fire
19Investigation Act on the date prescribed, including any
20extensions, 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

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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
15date mailed as evidenced by a postmark, proof of mailing on a
16recognized United States Postal Service form or a form
17acceptable to the United States Postal Service or other
18commercial mail delivery service, or other evidence acceptable
19to the Director.
20 (3)(a) When any insurance company fails to pay the full
21amount due under the provisions of this Section, Sections
22408.1, 409, 444, or 444.1 of this Code, or Section 12 of the
23Fire Investigation Act, there shall be added to the amount due
24as a penalty an amount equal to 10% of the deficiency.
25 (a-5) When any industrial insured or surplus line producer
26fails to pay the full amount due under the provisions of this

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1Section, Sections 121-2.08 or 445 of this Code, or Section 12
2of the Fire Investigation Act on the date prescribed, there
3shall 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
20mailed as evidenced by a postmark, proof of mailing on a
21recognized United States Postal Service form or a form
22acceptable to the United States Postal Service or other
23commercial mail delivery service, or other evidence acceptable
24to the Director.
25 (b) If such failure to pay is determined by the Director to
26be wilful, after a hearing under Sections 402 and 403, there

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1shall be added to the tax as a penalty an amount equal to the
2greater of 50% of the deficiency or 10% of the amount due and
3unpaid for each month or part of a month that the deficiency
4remains unpaid commencing with the date that the amount
5becomes due. Such amount shall be in lieu of any determined
6under paragraph (a) or (a-5).
7 (4) Any insurance company, industrial insured, or surplus
8line producer that fails to pay the full amount due under this
9Section or Sections 121-2.08, 408.1, 409, 444, 444.1, or 445
10of this Code, or Section 12 of the Fire Investigation Act is
11liable, in addition to the tax and any late fees and penalties,
12for interest on such deficiency at the rate of 12% per annum,
13or at such higher adjusted rates as are or may be established
14under subsection (b) of Section 6621 of the Internal Revenue
15Code, from the date that payment of any such tax was due,
16determined without regard to any extensions, to the date of
17payment of such amount.
18 (5) The Director, through the Attorney General, may
19institute an action in the name of the People of the State of
20Illinois, in any court of competent jurisdiction, for the
21recovery of the amount of such taxes, fees, and penalties due,
22and prosecute the same to final judgment, and take such steps
23as are necessary to collect the same.
24 (6) In the event that the certificate of authority of a
25foreign or non-domestic alien company is revoked for any cause
26or the company withdraws from this State prior to the renewal

SB3865 Engrossed- 466 -LRB102 24242 RJF 33473 b
1date of the certificate of authority as provided in Section
2114, the company may recover the amount of any such tax paid in
3advance. Except as provided in this subsection, no revocation
4or withdrawal excuses payment of or constitutes grounds for
5the recovery of any taxes or penalties imposed by this Code.
6 (7) When an insurance company or domestic affiliated group
7fails to pay the full amount of any fee of $200 or more due
8under Section 408 of this Code, there shall be added to the
9amount due as a penalty the greater of $100 or an amount equal
10to 10% of the deficiency for each month or part of a month that
11the deficiency remains unpaid.
12 (8) The Department shall have a lien for the taxes, fees,
13charges, fines, penalties, interest, other charges, or any
14portion thereof, imposed or assessed pursuant to this Code,
15upon all the real and personal property of any company or
16person to whom the assessment or final order has been issued or
17whenever a tax return is filed without payment of the tax or
18penalty shown therein to be due, including all such property
19of the company or person acquired after receipt of the
20assessment, issuance of the order, or filing of the return.
21The company or person is liable for the filing fee incurred by
22the Department for filing the lien and the filing fee incurred
23by the Department to file the release of that lien. The filing
24fees shall be paid to the Department in addition to payment of
25the tax, fee, charge, fine, penalty, interest, other charges,
26or any portion thereof, included in the amount of the lien.

SB3865 Engrossed- 467 -LRB102 24242 RJF 33473 b
1However, where the lien arises because of the issuance of a
2final order of the Director or tax assessment by the
3Department, the lien shall not attach and the notice referred
4to in this Section shall not be filed until all administrative
5proceedings or proceedings in court for review of the final
6order or assessment have terminated or the time for the taking
7thereof has expired without such proceedings being instituted.
8 Upon the granting of Department review after a lien has
9attached, the lien shall remain in full force except to the
10extent to which the final assessment may be reduced by a
11revised final assessment following the rehearing or review.
12The lien created by the issuance of a final assessment shall
13terminate, unless a notice of lien is filed, within 3 years
14after the date all proceedings in court for the review of the
15final assessment have terminated or the time for the taking
16thereof has expired without such proceedings being instituted,
17or (in the case of a revised final assessment issued pursuant
18to a rehearing or review by the Department) within 3 years
19after the date all proceedings in court for the review of such
20revised final assessment have terminated or the time for the
21taking thereof has expired without such proceedings being
22instituted. Where the lien results from the filing of a tax
23return without payment of the tax or penalty shown therein to
24be due, the lien shall terminate, unless a notice of lien is
25filed, within 3 years after the date when the return is filed
26with the Department.

SB3865 Engrossed- 468 -LRB102 24242 RJF 33473 b
1 The time limitation period on the Department's right to
2file a notice of lien shall not run during any period of time
3in which the order of any court has the effect of enjoining or
4restraining the Department from filing such notice of lien. If
5the Department finds that a company or person is about to
6depart from the State, to conceal himself or his property, or
7to do any other act tending to prejudice or to render wholly or
8partly ineffectual proceedings to collect the amount due and
9owing to the Department unless such proceedings are brought
10without delay, or if the Department finds that the collection
11of the amount due from any company or person will be
12jeopardized by delay, the Department shall give the company or
13person notice of such findings and shall make demand for
14immediate return and payment of the amount, whereupon the
15amount shall become immediately due and payable. If the
16company or person, within 5 days after the notice (or within
17such extension of time as the Department may grant), does not
18comply with the notice or show to the Department that the
19findings in the notice are erroneous, the Department may file
20a notice of jeopardy assessment lien in the office of the
21recorder of the county in which any property of the company or
22person may be located and shall notify the company or person of
23the filing. The jeopardy assessment lien shall have the same
24scope and effect as the statutory lien provided for in this
25Section. If the company or person believes that the company or
26person does not owe some or all of the tax for which the

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

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

SB3865 Engrossed- 471 -LRB102 24242 RJF 33473 b
1shall be filed in the office of the Registrar of Titles of the
2county within which the property subject to the lien is
3situated and shall be entered upon the register of titles as a
4memorial or charge upon each folium of the register of titles
5affected by such notice, and the Department shall not have a
6preference over the rights of any bona fide purchaser,
7mortgagee, judgment creditor, or other lienholder arising
8prior to the registration of such notice. The regular lien or
9jeopardy assessment lien shall not be effective against any
10purchaser with respect to any item in a retailer's stock in
11trade purchased from the retailer in the usual course of the
12retailer'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
16Non-domestic Alien Company.
17 (1) Every foreign or non-domestic alien company applying
18for a certificate of authority to transact business in this
19State shall pay to the Director a tax for the privilege of
20transacting business in this State in accordance with Section
21409.
22 (2) If during all or any part of the 3 year period next
23preceding the date of application for a certificate of
24authority the company had a certificate of authority to
25transact business in this State, or if it survives or was

SB3865 Engrossed- 472 -LRB102 24242 RJF 33473 b
1formed by a merger, consolidation, reorganization or
2reincorporation, and one or more of the parties thereto was a
3foreign or non-domestic alien company authorized to transact
4business in this State during all or any part of such 3 year
5period, then the tax shall be determined in accordance with
6Section 409 on the basis of the last entire calendar year
7during which the company or any one of the foreign or
8non-domestic alien companies parties to the merger,
9consolidation, reorganization or reincorporation was
10authorized to transact business in this State, or if none was
11authorized during any entire calendar year, then on the basis
12of the last partial calendar year during which any of such
13companies 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
17subdivisions. The fees, charges and taxes provided for by
18this Article shall be in lieu of all license fees or privilege
19or occupation taxes or other fees levied or assessed by any
20municipality, county or other political subdivision of this
21State, and no municipality, county or other political
22subdivision of this State shall impose any license fee or
23privilege or occupation tax or fee upon any domestic, foreign
24or non-domestic alien company, or upon any of its agents, for
25the privilege of doing an insurance business therein, except

SB3865 Engrossed- 473 -LRB102 24242 RJF 33473 b
1the tax authorized by Division 10 of Article 11 of the Illinois
2Municipal Code, as heretofore and hereafter amended. This
3Section shall not be construed to prohibit the levy and
4collection 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
15state or country shall require of companies incorporated or
16organized under the laws of this State as a condition
17precedent to their doing business in such other state or
18country, compliance with laws, rules, regulations, and
19prohibitions more onerous or burdensome than the rules and
20regulations imposed by this State on foreign or non-domestic
21alien companies, or shall require any deposit of securities or
22other obligations in such state or country, for the protection
23of policyholders or otherwise or require of such companies or
24agents thereof or brokers the payment of penalties, fees,
25charges, or taxes greater than the penalties, fees, charges,

SB3865 Engrossed- 474 -LRB102 24242 RJF 33473 b
1or taxes required in the aggregate for like purposes by this
2Code or any other law of this State, of foreign or non-domestic
3alien companies, agents thereof or brokers, then such laws,
4rules, regulations, and prohibitions of said other state or
5country shall apply to companies incorporated or organized
6under the laws of such state or country doing business in this
7State, and all such companies, agents thereof, or brokers
8doing business in this State, shall be required to make
9deposits, pay penalties, fees, charges, and taxes, in amounts
10equal to those required in the aggregate for like purposes of
11Illinois companies doing business in such state or country,
12agents thereof or brokers. Whenever any other state or country
13shall refuse to permit any insurance company incorporated or
14organized under the laws of this State to transact business
15according to its usual plan in such other state or country, the
16director may, if satisfied that such company of this State is
17solvent, properly managed, and can operate legally under the
18laws of such other state or country, forthwith suspend or
19cancel the license of every insurance company doing business
20in this State which is incorporated or organized under the
21laws of such other state or country to the extent that it
22insures in this State against any of the risks or hazards which
23are sought to be insured against by the company of this State
24in such other state or country.
25 (2) The provisions of this Section shall not apply to
26residual market or special purpose assessments or guaranty

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

SB3865 Engrossed- 476 -LRB102 24242 RJF 33473 b
1fees, charges, and taxes specified in Article XXV of this Code
2exclusive of any item referenced in subsection (2) of this
3Section; and any penalties, fees, charges, and taxes required
4as a franchise, privilege, or licensing tax for conducting the
5business of insurance whether calculated as a percentage of
6income, gross receipts, premium, or otherwise.
7 (4) Nothing contained in this Section or Section 409 or
8Section 444.1 is intended to authorize or expand any power of
9local governmental units or municipalities to impose taxes,
10fees, or charges.
11 (5) This Section is subject to the provisions of Section
1210 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
17insurance business in this State shall pay the Director the
18retaliatory tax determined in accordance with Section 444.
19 (2) (a) All companies subject to the provisions of this
20Section shall make an annual return for the preceding calendar
21year on or before March 15 setting forth such information on
22such forms as the Director may reasonably require. Payments of
23quarterly installments of the taxpayer's total estimated
24retaliatory tax for the current calendar year shall be due on
25or before April 15, June 15, September 15, and December 15 of

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1such year, except that all companies transacting insurance
2business in this State whose annual tax for the immediately
3preceding calendar year was less than $5,000 shall make only
4an annual return. Failure of a company to make the annual
5payment, or to make the quarterly payments, if required, of at
6least one-fourth of either (i) the total tax paid during the
7previous calendar year or (ii) 80% of the actual tax for the
8current calendar year shall subject it to the penalty
9provisions 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
12companies under Section 444 of this Code for the calendar year
13ended December 31, 1997 shall be determined in accordance with
14this amendatory Act of 1998 and shall include in the aggregate
15comparative tax burden for the State of Illinois, any tax
16offset allowed under Section 531.13 of this Code and any
17income taxes paid for the year 1997 under subsections (a)
18through (d) of Section 201 of the Illinois Income Tax Act after
19any 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

SB3865 Engrossed- 478 -LRB102 24242 RJF 33473 b
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
17returns prepared in compliance with Section 410 shall give
18full consideration to the impact of any future reduction in or
19elimination of a taxpayer's liability under Section 409,
20whether such reduction or elimination is due to an operation
21of law or an Act of the General Assembly.
22 (4) Any foreign or non-domestic alien taxpayer who makes,
23under protest, a tax payment required by Section 409 shall, at
24the time of payment, file a retaliatory tax return sufficient
25to disclose the full amount of retaliatory taxes which would
26be due and owing for the tax period in question if the protest

SB3865 Engrossed- 479 -LRB102 24242 RJF 33473 b
1were upheld. Notwithstanding the provisions of the State
2Officers and Employees Money Disposition Act or any other laws
3of this State, the protested payment, to the extent of the
4retaliatory tax so disclosed, shall be deposited directly in
5the General Revenue Fund; and the balance of the payment, if
6any, shall be deposited in a protest account pursuant to the
7provisions of the aforesaid Act, as now or hereafter amended.
8 (5) The failure of a company to make the annual payment or
9to make the quarterly payments, if required, of at least
10one-fourth of either (i) the total tax paid during the
11preceding calendar year or (ii) 80% of the actual tax for the
12current calendar year shall subject it to the penalty
13provisions set forth in Section 412 of this Code.
14 (6) This Section is subject to the provisions of Section
1510 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
21that controls, is controlled by, or is under common control
22with the insured. For the purpose of this definition, an
23entity 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
7all affiliated.
8 "Authorized insurer" means an insurer that holds a
9certificate of authority issued by the Director but, for the
10purposes of this Section, does not include a domestic surplus
11line insurer as defined in Section 445a or any residual market
12mechanism.
13 "Exempt commercial purchaser" means any person purchasing
14commercial insurance that, at the time of placement, meets the
15following 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.

SB3865 Engrossed- 481 -LRB102 24242 RJF 33473 b
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
17occurring thereafter, the amounts in subitems (I), (II), and
18(IV) of item (C) of this definition shall be adjusted to
19reflect the percentage change for such 5-year period in the
20Consumer Price Index for All Urban Consumers published by the
21Bureau 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.

SB3865 Engrossed- 483 -LRB102 24242 RJF 33473 b
1 Nothing in this definition shall be construed to alter the
2terms of the surplus line insurance contract.
3 "Master policy" means a surplus line insurance contract
4with a single set of general contractual terms that are
5designed to apply on a group basis to multiple insureds who may
6or may not be affiliated and who may be added to or removed
7from the contract throughout the course of the contract
8period. A master policy may include certain provisions that
9vary for each insured depending on the insured's
10characteristics and the coverage sought.
11 "Multi-State risk" means a risk with insured exposures in
12more than one State.
13 "NAIC" means the National Association of Insurance
14Commissioners or any successor entity.
15 "Personal lines insurance" means insurance as defined in
16subsection (a), (b), or (c) of Section 143.13 of this Code.
17 "Premium" means any amount designated as premium on the
18declarations page or elsewhere in a policy and on any
19endorsement, but does not include taxes, the Surplus Line
20Association of Illinois recording fee, or any other fee.
21 "Program business" means a clearly defined group of
22insurance contracts procured by a licensed surplus line
23producer from an unauthorized insurer, under a single
24agreement between the producer and insurer, for insureds with
25the same or similar characteristics and containing the same or
26similar contract terms.

SB3865 Engrossed- 484 -LRB102 24242 RJF 33473 b
1 "Qualified risk manager" means, with respect to a
2policyholder of commercial insurance, a person who meets all
3of 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

SB3865 Engrossed- 485 -LRB102 24242 RJF 33473 b
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,
10organization, or other entity described in Article XXXIII of
11this Code or Section 7-501 of the Illinois Vehicle Code or any
12similar association, organization, or other entity.
13 "State" means any state of the United States, the District
14of Columbia, the Commonwealth of Puerto Rico, Guam, the
15Northern Mariana Islands, the Virgin Islands, and American
16Samoa.
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,

SB3865 Engrossed- 487 -LRB102 24242 RJF 33473 b
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
6located in or attributed to any state.
7 "Unauthorized insurer" means an insurer that does not hold
8a valid certificate of authority issued by the Director but,
9for the purposes of this Section, shall also include a
10domestic surplus line insurer as defined in Section 445a.
11 (1.5) Procuring surplus line insurance; surplus line
12insurer 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;

SB3865 Engrossed- 489 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 490 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 491 -LRB102 24242 RJF 33473 b
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
9who is a resident of this State, or any nonresident who
10qualifies under Section 500-40, may be licensed as a surplus
11line producer upon payment of an annual license fee of $400.
12 A surplus line producer so licensed shall keep a separate
13account of the business transacted thereunder for 7 years from
14the policy effective date which shall be open at all times to
15the inspection of the Director or his representative.
16 No later than July 21, 2012, the State of Illinois shall
17participate in the national insurance producer database of the
18NAIC, or any other equivalent uniform national database, for
19the licensure of surplus line producers and the renewal of
20such 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;

SB3865 Engrossed- 492 -LRB102 24242 RJF 33473 b
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.

SB3865 Engrossed- 493 -LRB102 24242 RJF 33473 b
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
15Illinois. A surplus line producer shall submit every insurance
16contract and premium-bearing endorsement issued under his or
17her license to the Surplus Line Association of Illinois for
18recording. The submission and recording may be effected
19through 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;

SB3865 Engrossed- 494 -LRB102 24242 RJF 33473 b
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
5incidental to the insurance but which do not affect the
6premium charged are exempted from the submission and recording
7requirements.
8 The submission of insuring contracts to the Surplus Line
9Association of Illinois constitutes a certification by the
10surplus line producer or by the insurance producer who
11presented the risk to the surplus line producer for placement
12as a surplus line risk that after diligent effort, where
13required, the required insurance could not be procured from
14authorized insurers and that such procurement was otherwise in
15accordance with the surplus line law.
16 (6) Evidence of recording required. It shall be unlawful
17for an insurance producer to deliver any unauthorized insurer
18contract or premium-bearing endorsement unless it contains
19evidence of recording by the Surplus Line Association of
20Illinois.
21 (7) Inspection of records. A surplus line producer shall
22maintain separate records of the business transacted under his
23or her license for 7 years from the policy effective date,
24including complete copies of surplus line insurance contracts
25maintained on paper or by electronic means, which records
26shall be open at all times for inspection by the Director and

SB3865 Engrossed- 495 -LRB102 24242 RJF 33473 b
1by the Surplus Line Association of Illinois.
2 (8) Violations and penalties. The Director may suspend or
3revoke or refuse to renew a surplus line producer license for
4any violation of this Code. In addition to or in lieu of
5suspension or revocation, the Director may subject a surplus
6line producer to a civil penalty of up to $2,000 for each cause
7for suspension or revocation. Such penalty is enforceable
8under subsection (5) of Section 403A of this Code.
9 Whenever it appears to the satisfaction of the Director
10that a surplus line producer has made a documented good faith
11determination of the home state for a surplus line insurance
12contract and has paid the surplus line taxes to a state other
13than Illinois, and the Director determines that the producer's
14good faith determination was incorrect and the home state is
15Illinois, the surplus line producer may, at the discretion of
16the Director, be required to submit the contract to the
17Surplus Line Association of Illinois and pay applicable taxes
18and recording fees, but there shall be no penalty, interest,
19or late fee assessed.
20 (9) Director may declare insurer ineligible. If the
21Director determines that the further assumption of risks might
22be hazardous to the policyholders of an unauthorized insurer,
23the Director may order the Surplus Line Association of
24Illinois not to accept and record insurance contracts
25evidencing insurance in such insurer and order surplus line
26producers to cease procuring insurance from such insurer.

SB3865 Engrossed- 496 -LRB102 24242 RJF 33473 b
1 (10) Service of process upon Director. Insurance contracts
2delivered under this Section from unauthorized insurers, other
3than domestic surplus line insurers as defined in Section
4445a, shall contain a provision designating the Director and
5his successors in office the true and lawful attorney of the
6insurer upon whom may be served all lawful process in any
7action, suit or proceeding arising out of such insurance.
8Service of process made upon the Director to be valid
9hereunder must state the name of the insured, the name of the
10unauthorized insurer and identify the contract of insurance.
11The Director at his option is authorized to forward a copy of
12the process to the Surplus Line Association of Illinois for
13delivery to the unauthorized insurer or the Director may
14deliver the process to the unauthorized insurer by other means
15which he considers to be reasonably prompt and certain.
16 (10.5) Required notice to policyholder. Insurance
17contracts delivered under this Section from unauthorized
18insurers, other than domestic surplus line insurers as defined
19in Section 445a, shall have stamped or imprinted on the first
20page thereof in not less than 12-pt. bold face type the
21following legend: "Notice to Policyholder: This contract is
22issued, pursuant to Section 445 of the Illinois Insurance
23Code, by a company not authorized and licensed to transact
24business in Illinois and as such is not covered by the Illinois
25Insurance Guaranty Fund." Insurance contracts delivered under
26this Section from domestic surplus line insurers as defined in

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1Section 445a shall have stamped or imprinted on the first page
2thereof in not less than 12-pt. bold face type the following
3legend: "Notice to Policyholder: This contract is issued by a
4domestic surplus line insurer, as defined in Section 445a of
5the Illinois Insurance Code, pursuant to Section 445, and as
6such is not covered by the Illinois Insurance Guaranty Fund."
7 (11) Marine, aviation, and transportation. The Illinois
8Surplus Line law does not apply to insurance of property and
9operations of railroads or aircraft engaged in interstate or
10foreign commerce, insurance of vessels, crafts or hulls,
11cargoes, marine builder's risks, marine protection and
12indemnity, or other risks including strikes and war risks
13insured under ocean or wet marine forms of policies.
14 (12) Applicability of Illinois Insurance Code. Surplus
15line insurance procured under this Section, including
16insurance procured from a domestic surplus line insurer, is
17not subject to the provisions of the Illinois Insurance Code
18other than Sections 123, 123.1, 401, 401.1, 402, 403, 403A,
19408, 412, 445, 445a, 445.1, 445.2, 445.3, 445.4, and all of the
20provisions of Article XXXI to the extent that the provisions
21of Article XXXI are not inconsistent with the terms of this
22Act.
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
2prescribe such regulations, provisions, and limitations as it
3may deem advisable, which regulations, provisions, and
4limitations shall be binding upon any and all companies,
5domestic, foreign or non-domestic alien, subject to the
6provisions of this Code, and the General Assembly shall have
7power 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
11not apply to companies now or hereafter organized or
12transacting business under the Title Insurance Act, or Act
13amendatory thereof, supplementary thereto, or in replacement
14thereof; nor to corporations now or hereafter organized and
15transacting business under "An Act to provide for the
16incorporation and regulation of nonprofit hospital service
17corporations" approved July 6, 1935, or Act amendatory thereof
18or supplementary thereto; nor shall any part of this Code
19other than Articles X, XI, XIII, and XXIV apply to companies
20now or hereafter organized or transacting business under an
21Act entitled, "An Act relating to local mutual district,
22county and township insurance companies," approved March 13,
231936, or Act amendatory thereof or supplementary thereto. No
24domestic company shall be organized under this Code, nor shall
25any foreign or non-domestic alien company receive a

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1certificate of authority under this Code, to transact the
2business of title insurance. The changes made to this Section
3by Public Act 96-334 are a statement and clarification of
4existing 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
9carry out the powers and duties of the Association, the board
10of directors shall assess the member insurers, separately for
11each account, at such times and for such amounts as the board
12finds necessary. Assessments shall be due not less than 30
13days after written notice to the member insurers and shall
14accrue interest from the due date at such adjusted rate as is
15established under Section 6621 of Chapter 26 of the United
16States 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
3determined at the discretion of the board of directors and
4such assessments shall be authorized and called on a non-pro
5rata basis. The amount of any Class B assessment, except for
6assessments related to long-term care insurance, shall be
7allocated for assessment purposes among the accounts and
8subaccounts pursuant to an allocation formula which may be
9based on the premiums or reserves of the impaired or insolvent
10insurer or any other standard deemed by the board in its sole
11discretion as being fair and reasonable under the
12circumstances.
13 (b) Class B assessments against member insurers for each
14account and subaccount shall be in the proportion that the
15premiums received on business in this State by each assessed
16member insurer on policies or contracts covered by each
17account or subaccount for the three most recent calendar years
18for which information is available preceding the year in which
19the member insurer became impaired or insolvent, as the case
20may be, bears to such premiums received on business in this
21State for such calendar years by all assessed member insurers.
22 (b-5) The amount of the Class B assessment for long-term
23care insurance written by the impaired or insolvent insurer
24shall be allocated according to a methodology included in the
25plan of operation and approved by the Director. The
26methodology shall provide for 50% of the assessment to be

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

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

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

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1 (9) The Association must issue to each member insurer
2paying a Class B assessment under this Article a certificate
3of contribution, in a form acceptable to the Director, for the
4amount of the assessment so paid. All outstanding certificates
5are of equal dignity and priority without reference to amounts
6or dates of issue. A certificate of contribution may be shown
7by the member insurer in its financial statement as an asset in
8such form and for such amount, if any, and period of time as
9the Director may approve, provided the member insurer shall in
10any event at its option have the right to show a certificate of
11contribution as an admitted asset at percentages of the
12original 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
15issuance;
16 60% for the third calendar year after the year of
17issuance;
18 40% for the fourth calendar year after the year of
19issuance;
20 20% for the fifth calendar year after the year of
21issuance.
22 (10) The Association may request information of member
23insurers in order to aid in the exercise of its power under
24this Section and member insurers shall promptly comply with a
25request.
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
3addition to the duties and powers enumerated elsewhere in this
4Article:
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
22insurance company organized as a stock company, mutual
23company, reciprocal or Lloyds, which holds a certificate of
24authority to transact any kind of insurance in this State to
25which this Article applies, and which is either:

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1 (a) a domestic insurance company formed before or after
2the 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
5effective on the day following the termination or expiration
6of its license to transact the kinds of insurance to which this
7Article applies; provided, however, that the insurance company
8shall remain liable as a member company for any and all
9obligations, including obligations for assessments levied
10before the termination or expiration of the insurance
11company's license and assessments levied after the termination
12or expiration, based on any insolvency as to which the
13determination of insolvency by a court of competent
14jurisdiction occurs before the termination or expiration of
15the 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
19complaint seeking an Order of Liquidation with a finding of
20insolvency against a domestic member company on the Fund at
21the same time that such complaint is filed with the circuit
22court or shall forward to the Fund notice of the filing of such
23a complaint against a foreign or non-domestic alien member
24company promptly upon receipt thereof. The Director also shall
25serve on the Fund a copy of an Order of Liquidation with a

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1finding of insolvency against a domestic member company
2immediately after it is entered by the circuit court or shall
3forward to the Fund a copy of such order against a foreign or
4non-domestic alien member company promptly upon receipt
5thereof.
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
9under this Article shall not be the same as or deceptively
10similar to the name of any domestic insurance company or of any
11foreign or non-domestic alien insurance company authorized to
12transact business in this State.
13(Source: P.A. 84-1431.)
14 Section 95. The Reinsurance Intermediary Act is amended by
15changing 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
19of the American Academy of Actuaries.
20 "Controlling person" means any person, firm, association,
21or corporation that directly or indirectly has the power to
22direct or cause to be directed the management, control, or
23activities of the reinsurance intermediary.

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

SB3865 Engrossed- 510 -LRB102 24242 RJF 33473 b
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
14corporation duly licensed in this State under the applicable
15provisions of law as an insurer with the authority to assume
16reinsurance.
17 "To be in violation" means that the reinsurance
18intermediary, insurer, or reinsurer for whom the reinsurance
19intermediary was acting failed to substantially comply with
20the provisions of this Act.
21 "Qualified United States financial institution" means an
22institution 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
12is 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
16in Section 15 of this Act, any person who is either a citizen
17of the United States or a noncitizen an alien lawfully
18admitted for permanent residence and who has been for a period
19of at least 180 days and continues to be a resident of this
20State shall be eligible for Plan coverage under this Section
21if 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
8insurance issuer offering only stop-loss or excess of loss
9insurance or contracts, agreements, or other arrangements for
10reinsurance coverage with respect to the applicant shall not
11be sufficient evidence under this subsection.
12 b. The Board shall promulgate a list of medical or health
13conditions for which a person who is either a citizen of the
14United States or a noncitizen an alien lawfully admitted for
15permanent residence and a resident of this State would be
16eligible for Plan coverage without applying for health
17insurance coverage pursuant to subsection a. of this Section.
18Persons who can demonstrate the existence or history of any
19medical or health conditions on the list promulgated by the
20Board shall not be required to provide the evidence specified
21in subsection a. of this Section. The list shall be effective
22on the first day of the operation of the Plan and may be
23amended from time to time as appropriate.
24 c. Family members of the same household who each are
25covered persons are eligible for optional family coverage
26under the Plan.

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1 d. For persons qualifying for coverage in accordance with
2Section 7 of this Act, the Board shall, if it determines that
3such appropriations as are made pursuant to Section 12 of this
4Act are insufficient to allow the Board to accept all of the
5eligible persons which it projects will apply for enrollment
6under the Plan, limit or close enrollment to ensure that the
7Plan is not over-subscribed and that it has sufficient
8resources to meet its obligations to existing enrollees. The
9Board shall not limit or close enrollment for federally
10eligible individuals.
11 e. A person shall not be eligible for coverage under the
12Plan 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

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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
21verification of residency and may require any additional
22information or documentation, or statements under oath, when
23necessary to determine residency upon initial application and
24for the entire term of the policy.
25 g. Coverage shall cease (i) on the date a person is no
26longer a resident of Illinois, (ii) on the date a person

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1requests coverage to end, (iii) upon the death of the covered
2person, (iv) on the date State law requires cancellation of
3the policy, or (v) at the Plan's option, 30 days after the Plan
4makes any inquiry concerning a person's eligibility or place
5of residence to which the person does not reply.
6 h. Except under the conditions set forth in subsection g
7of this Section, the coverage of any person who ceases to meet
8the eligibility requirements of this Section shall be
9terminated at the end of the current policy period for which
10the 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
13Trust 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
16ineligible (1) if it is not exempt from taxation under
17paragraph (3) of subsection (c) of Section 501 of the Internal
18Revenue Code of 1954 as amended, or an affiliate of a
19corporation exempt from taxation under paragraph (3) of
20subsection (c) of Section 501 of the Internal Revenue Code, as
21amended, and exempt from taxation under paragraph (2) of
22subsection (c) of Section 501 of the Internal Revenue Code of
231954, as amended, or tax exempt as a unit of local government
24or as a hospital owned and operated by a unit of local

SB3865 Engrossed- 518 -LRB102 24242 RJF 33473 b
1government; (2) if a corporation, it is not incorporated as a
2not-for-profit corporation; or (3) if a foreign or
3non-domestic alien corporation, it no longer has a Certificate
4of 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
7changing 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
11maintain a statutory premium reserve computed in accordance
12with this Section. The reserve shall be reported as a
13liability of the title insurance company in its financial
14statements. The statutory premium reserve shall be maintained
15by the title insurance company for the protection of holders
16of title insurance policies. Except as provided in this
17Section, assets equal in value to the statutory premium
18reserve are not subject to distribution among creditors or
19stockholders of the title insurance company until all claims
20of policyholders or claims under reinsurance contracts have
21been paid in full and discharged, lawfully reinsured, or
22otherwise assumed by another title insurance company
23authorized to do business under this Act.
24 (b) A foreign or non-domestic alien title insurance

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1company authorized to do business under this Act shall
2maintain at least the same reserves on title insurance
3policies issued on properties located in this State as are
4required 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
13year in accordance with this Section shall be deducted in
14determining the net profit of the title insurance company for
15that year.
16 (e) A title insurance company shall release from the
17statutory premium reserve a sum equal to 10% of the amount
18added to the reserve during a calendar year on July 1 of each
19of the 5 years following the year in which the sum was added,
20and shall release from the statutory premium reserve a sum
21equal to 3 1/3% of the amount added to the reserve during that
22year on each succeeding July 1 until the entire amount for that
23year has been released. The amount of the statutory premium
24reserve or similar premium reserve maintained before January
251, 1990, shall be released in accordance with the law in effect
26before January 1, 1990.

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

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1amended 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
5defined in Rule 501(a) promulgated under the Securities Act of
61933 (15 U.S.C. 77 et seq.), as amended.
7 "Advertising" means any written, electronic, or printed
8communication or any communication by means of recorded
9telephone messages or transmitted on radio, television, the
10Internet, or similar communications media, including film
11strips, digital picture slides, motion pictures, and videos
12published, disseminated, circulated, or placed before the
13public in this State, for the purpose of creating an interest
14in or inducing a person to sell, assign, devise, bequest, or
15transfer the death benefit or ownership of a policy pursuant
16to a viatical settlement contract.
17 "Non-domestic Alien licensee" means a licensee
18incorporated or organized under the laws of any country other
19than the United States.
20 "Business of viatical settlements" means any activity
21involved in, but not limited to, the offering, soliciting,
22negotiating, procuring, effectuating, purchasing, investing,
23financing, monitoring, tracking, underwriting, selling,
24transferring, assigning, pledging, or hypothecating or in any
25other manner acquiring an interest in a life insurance policy

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1by means of a viatical settlement contract or other agreement.
2 "Chronically ill" means having been certified within the
3preceding 12-month period by a licensed health professional
4as:
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,
18or corporation that directly or indirectly has the power to
19direct or cause to be directed the management, control, or
20activities of the viatical settlement provider.
21 "Director" means the Director of the Division of Insurance
22of the Department of Financial and Professional Regulation.
23 "Division" means the Division of Insurance of the
24Department of Financial and Professional Regulation.
25 "Escrow agent" means an independent third-party person
26who, pursuant to a written agreement signed by the viatical

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1settlement provider and viator, provides escrow services
2related to the acquisition of a life insurance policy pursuant
3to a viatical settlement contract. "Escrow agent" does not
4include any person associated or affiliated with or under the
5control of a licensee.
6 "Financial institution" means a financial institution as
7defined by the Financial Institutions Insurance Sales Law in
8Article XLIV of the Illinois Insurance Code.
9 "Financing entity" means an underwriter, placement agent,
10lender, purchaser of securities, purchaser of a policy or
11certificate from a viatical settlement provider, credit
12enhancer, or an entity that has a direct ownership in a policy
13that is the subject of a viatical settlement contract, and to
14which 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
22accredited investor.
23 "Financing transaction" means a transaction in which a
24viatical settlement provider obtains financing from a
25financing entity, including, without limitation, any secured
26or unsecured financing, securitization transaction, or

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1securities offering that either is registered or exempt from
2registration under federal and State securities law.
3 "Foreign licensee" means any viatical settlement provider
4incorporated or organized under the laws of any state of the
5United States other than this State.
6 "Insurance producer" means an insurance producer as
7defined by Section 10 of Article XXXI of the Illinois
8Insurance Code.
9 "Licensee" means a viatical settlement provider or
10viatical settlement broker.
11 "Life expectancy provider" means a person who determines
12or holds himself or herself out as determining life
13expectancies or mortality ratings used to determine life
14expectancies on behalf of or in connection with any of the
15following:
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
23Commissioners.
24 "Person" means an individual or a legal entity, including,
25without limitation, a partnership, limited liability company,
26limited liability partnership, association, trust, business

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

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

SB3865 Engrossed- 527 -LRB102 24242 RJF 33473 b
1 "Viatical settlement broker" means a licensed insurance
2producer who has been issued a license pursuant to paragraph
3(1) or (2) of subsection (a) of Section 500-35 of the Illinois
4Insurance Code who, working exclusively on behalf of a viator
5and for a fee, commission, or other valuable consideration,
6offers, solicits, promotes, or attempts to negotiate viatical
7settlement contracts between a viator and one or more viatical
8settlement providers or one or more viatical settlement
9brokers. "Viatical settlement broker" does not include an
10attorney, certified public accountant, or a financial planner
11accredited by a nationally recognized accreditation agency,
12who is retained to represent the viator and whose compensation
13is not paid directly or indirectly by the viatical settlement
14provider 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

SB3865 Engrossed- 528 -LRB102 24242 RJF 33473 b
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
19following acts, practices, or arrangements listed below in
20subparagraphs (a) through (i) of this definition of "viatical
21settlement contract", unless part of a plan, scheme, device,
22or artifice to avoid application of this Act; provided,
23however, that the list of excluded items contained in
24subparagraphs (a) through (i) is not intended to be an
25exhaustive list and that an act, practice, or arrangement that
26is not described below in subparagraphs (a) through (i) does

SB3865 Engrossed- 529 -LRB102 24242 RJF 33473 b
1not 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

SB3865 Engrossed- 530 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 531 -LRB102 24242 RJF 33473 b
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
6is an appointed or contracted agent of a licensed viatical
7settlement provider who solicits or arranges the funding for
8the purchase of a viatical settlement by a viatical settlement
9purchaser and who is acting on behalf of a viatical settlement
10provider. A viatical settlement investment agent is deemed to
11represent the viatical settlement provider of whom the
12viatical settlement investment agent is an appointed or
13contracted agent.
14 "Viatical settlement provider" means a person, other than
15a viator, who enters into or effectuates a viatical settlement
16contract with a viator. "Viatical settlement provider" does
17not 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

SB3865 Engrossed- 532 -LRB102 24242 RJF 33473 b
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
19provides a sum of money as consideration for a life insurance
20policy or an interest in the death benefits of a life insurance
21policy, or a person who owns or acquires or is entitled to a
22beneficial interest in a trust that owns a viatical settlement
23contract or is the beneficiary of a life insurance policy, in
24each case where such policy has been or will be the subject of
25a viatical settlement contract, for the purpose of deriving an
26economic benefit. "Viatical settlement purchaser" does not

SB3865 Engrossed- 533 -LRB102 24242 RJF 33473 b
1include: (i) a licensee under this Act; (ii) an accredited
2investor or qualified institutional buyer; (iii) a financing
3entity; (iv) a special purpose entity; or (v) a related
4provider trust.
5 "Viaticated policy" means a life insurance policy that has
6been acquired by a viatical settlement provider pursuant to a
7viatical settlement contract.
8 "Viator" means the owner of a life insurance policy or a
9certificate holder under a group policy who enters or seeks to
10enter into a viatical settlement contract. For the purposes of
11this Act, a viator is not limited to an owner of a life
12insurance policy or a certificate holder under a group policy
13insuring the life of an individual with a terminal or chronic
14illness 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
25deems it reasonably necessary to protect the interests of the

SB3865 Engrossed- 534 -LRB102 24242 RJF 33473 b
1public, examine the business affairs of any licensee.
2 In scheduling and determining the nature, scope, and
3frequency of the examinations, the Director shall consider
4such matters as consumer complaints, results of financial
5statement analyses and ratios, changes in management or
6ownership, actuarial opinions, report of independent certified
7public accountants, and other relevant criteria as determined
8by the Director.
9 (b) For purposes of completing an examination of a
10licensee under this Act, the Director may examine or
11investigate any person, or the business of any person, in so
12far as the examination or investigation is, in the sole
13discretion of the Director, necessary or material to the
14examination.
15 (c) In lieu of an examination under this Act of any foreign
16licensee or non-domestic alien licensee licensed in this
17State, the Director may, at the Director's discretion, accept
18an examination report on the licensee as prepared by the chief
19insurance regulatory official for the licensee's state of
20domicile or port-of-entry state.
21 (d) As far as practical, the examination of a foreign
22licensee or non-domestic alien licensee shall be made in
23cooperation with the insurance supervisory officials of other
24states in which the licensee transacts business.
25 (e) Licensees shall for 5 years retain copies of:
26 (1) all proposed, offered, or executed contracts,

SB3865 Engrossed- 535 -LRB102 24242 RJF 33473 b
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
15obligation to produce records required by this subsection to
16the Director after the retention period has expired if the
17person has retained the documents.
18 Records required to be retained by this subsection (e)
19must be legible and complete and may be retained in paper,
20photograph, microprocessor, magnetic, mechanical, or
21electronic media, or by any process that accurately reproduces
22or forms a durable medium for the reproduction of a record.
23 (f) Upon determining that an examination should be
24conducted, the Director shall appoint one or more examiners to
25perform the examination and instruct them as to the scope of
26the examination. The Director may employ any guidelines or

SB3865 Engrossed- 536 -LRB102 24242 RJF 33473 b
1procedures for purposes of this subsection (f) that the
2Director deems appropriate.
3 Every licensee or person, including all officers,
4partners, members, directors, employees, controlling persons,
5and agents of any licensee or person, from whom information is
6sought shall provide to the examiners timely, convenient, and
7free access at all reasonable hours at the licensee's or
8person's offices to all books, records, accounts, papers,
9documents, assets, and computer or other recordings relating
10to the property, assets, business, and affairs of the licensee
11being examined. The officers, directors, employees, and agents
12of the licensee or person shall facilitate the examination and
13aid in the examination so far as it is in their power to do so.
14The refusal of a licensee by its officers, directors,
15employees, or agents to submit to examination or to comply
16with any reasonable written request of the Director shall be
17grounds for revocation, denial of issuance, or non-renewal of
18any license or authority held by the licensee to engage in the
19viatical settlement business or other business subject to the
20Director's jurisdiction.
21 The Director shall have the power to issue subpoenas, to
22administer oaths, and to examine under oath any person as to
23any matter pertinent to the examination. Upon the failure or
24refusal of a person to obey a subpoena, the Director may
25petition a court of competent jurisdiction, and upon proper
26showing, the court may enter an order compelling the witness

SB3865 Engrossed- 537 -LRB102 24242 RJF 33473 b
1to appear and testify or produce documentary evidence. Failure
2to obey the court order shall be punishable as contempt of
3court. Subpoenas may be enforced pursuant to Section 403 of
4the Illinois Insurance Code.
5 When making an examination under this Act, the Director
6may retain attorneys, appraisers, independent actuaries,
7independent certified public accountants, or other
8professionals and specialists as examiners, the reasonable
9cost of which shall be borne by the licensee that is the
10subject of the examination.
11 (g) Nothing contained in this Act limits the Director's
12authority to terminate or suspend an examination in order to
13pursue other legal or regulatory action pursuant to the
14insurance laws of this State. Findings of fact and conclusions
15made pursuant to any examination shall be prima facie evidence
16in any legal or regulatory action.
17 (h) Nothing contained in this Act shall be construed to
18limit the Director's authority to use and, if appropriate, to
19make public any final or preliminary examination report, any
20examiner or licensee workpapers or other documents, or any
21other information discovered or developed during the course of
22any examination in the furtherance of any legal or regulatory
23action that the Director may, in the Director's discretion,
24deem appropriate.
25 (i) No later than 60 days following completion of the
26examination, the examiner in charge shall file with the

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

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

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

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

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1dispense, test, select, recommend, fit, or service hearing
2instruments. The frequency of holding these examinations shall
3be determined by the Department by rule. Those who
4successfully pass such an examination shall be issued a
5license as a hearing instrument dispenser, which shall be
6effective 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
16the applicant involving matters set forth in Sections 17 and
1718 shall be considered in determining moral character, but
18such a conviction or finding shall not make an applicant
19ineligible to register for examination.
20 (c) Prior to engaging in the practice of fitting,
21dispensing, or servicing hearing instruments, an applicant
22shall demonstrate, by means of written and practical
23examinations, that such person is qualified to practice the
24testing, selecting, recommending, fitting, selling, or
25servicing of hearing instruments as defined in this Act. An
26applicant must obtain a license within 12 months after passing

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

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1semester hours of hearing science, 3 semester hours of
2introduction to audiology, and 3 semester hours of aural
3rehabilitation, or the quarter hour equivalent or (2) an
4equivalent program as determined by the Department that is
5consistent with the scope of practice of a hearing instrument
6dispenser as defined in Section 3 of this Act. Persons
7licensed before January 1, 2003 who have a valid license on
8that date may have their license renewed without meeting the
9requirements of this subsection.
10(Source: P.A. 98-827, eff. 1-1-15; 99-204, eff. 7-30-15;
1199-847, eff. 8-19-16.)
12 Section 125. The Appraisal Management Company Registration
13Act 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
17by the Department in the applicant's or registrant's
18application file or registration file maintained by the
19Department's registration maintenance unit.
20 "Applicant" means a person or entity who applies to the
21Department for a registration under this Act.
22 "Appraisal" means (noun) the act or process of developing
23an opinion of value; an opinion of value (adjective) of or
24pertaining to appraising and related functions.

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1 "Appraisal firm" means an appraisal entity that is 100%
2owned and controlled by a person or persons licensed in
3Illinois as a certified general real estate appraiser or a
4certified residential real estate appraiser. An appraisal firm
5does not include an appraisal management company.
6 "Appraisal management company" means any corporation,
7limited liability company, partnership, sole proprietorship,
8subsidiary, unit, or other business entity that directly or
9indirectly: (1) provides appraisal management services to
10creditors or secondary mortgage market participants, including
11affiliates; (2) provides appraisal management services in
12connection with valuing the consumer's principal dwelling as
13security for a consumer credit transaction (including consumer
14credit transactions incorporated into securitizations); and
15(3) any appraisal management company that, within a given
1612-month period, oversees an appraiser panel of 16 or more
17State-certified appraisers in Illinois or 25 or more
18State-certified or State-licensed appraisers in 2 or more
19jurisdictions. "Appraisal management company" includes a
20hybrid entity.
21 "Appraisal management company national registry fee" means
22the fee implemented pursuant to Title XI of the federal
23Financial Institutions Reform, Recovery, and Enforcement Act
24of 1989 for an appraiser management company's national
25registry.
26 "Appraisal management services" means one or more of the

SB3865 Engrossed- 548 -LRB102 24242 RJF 33473 b
1following:
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
15licensed or certified appraisers approved by the appraisal
16management company or by the end-user client to perform
17appraisals as independent contractors for the appraisal
18management company. "Appraiser panel" includes both appraisers
19accepted by an appraisal management company for consideration
20for future appraisal assignments and appraisers engaged by an
21appraisal management company to perform one or more
22appraisals. For the purposes of determining the size of an
23appraiser panel, only independent contractors of hybrid
24entities shall be counted towards the appraiser panel.
25 "Appraiser panel fee" means the amount collected from a
26registrant that, where applicable, includes an appraisal

SB3865 Engrossed- 549 -LRB102 24242 RJF 33473 b
1management company's national registry fee.
2 "Appraisal report" means a written appraisal by an
3appraiser to a client.
4 "Appraisal practice service" means valuation services
5performed by an individual acting as an appraiser, including,
6but not limited to, appraisal or appraisal review.
7 "Appraisal subcommittee" means the appraisal subcommittee
8of the Federal Financial Institutions Examination Council as
9established by Title XI.
10 "Appraiser" means a person who performs real estate or
11real property appraisals.
12 "Assignment result" means an appraiser's opinions and
13conclusions developed specific to an assignment.
14 "Audit" includes, but is not limited to, an annual or
15special audit, visit, or review necessary under this Act or
16required by the Secretary or the Secretary's authorized
17representative in carrying out the duties and responsibilities
18under this Act.
19 "Client" means the party or parties who engage an
20appraiser by employment or contract in a specific appraisal
21assignment.
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

SB3865 Engrossed- 550 -LRB102 24242 RJF 33473 b
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
15secured by a consumer's principal dwelling.
16 "Department" means the Department of Financial and
17Professional Regulation.
18 "Email address of record" means the designated email
19address recorded by the Department in the applicant's
20application file or the registrant's registration file
21maintained by the Department's registration maintenance unit.
22 "Entity" means a corporation, a limited liability company,
23partnership, a sole proprietorship, or other entity providing
24services or holding itself out to provide services as an
25appraisal management company or an appraisal management
26service.

SB3865 Engrossed- 551 -LRB102 24242 RJF 33473 b
1 "End-user client" means any person who utilizes or engages
2the services of an appraiser through an appraisal management
3company.
4 "Federally regulated appraisal management company" means
5an appraisal management company that is owned and controlled
6by an insured depository institution, as defined in 12 U.S.C.
71813, or an insured credit union, as defined in 12 U.S.C. 1752,
8and regulated by the Office of the Comptroller of the
9Currency, the Federal Reserve Board, the National Credit Union
10Association, or the Federal Deposit Insurance Corporation.
11 "Financial institution" means any bank, savings bank,
12savings and loan association, credit union, mortgage broker,
13mortgage banker, registrant under the Consumer Installment
14Loan Act or the Sales Finance Agency Act, or a corporate
15fiduciary, subsidiary, affiliate, parent company, or holding
16company of any registrant, or any institution involved in real
17estate financing that is regulated by State or federal law.
18 "Foreign appraisal management company" means any appraisal
19management company organized under the laws of any other state
20of the United States, the District of Columbia, or any other
21jurisdiction of the United States.
22 "Hybrid entity" means an appraisal management company that
23hires an appraiser as an employee to perform an appraisal and
24engages an independent contractor to perform an appraisal.
25 "Multi-state licensing system" means a web-based platform
26that allows an applicant to submit the application or

SB3865 Engrossed- 552 -LRB102 24242 RJF 33473 b
1registration renewal to the Department online.
2 "Person" means individuals, entities, sole
3proprietorships, corporations, limited liability companies,
4and non-domestic alien, foreign, or domestic partnerships,
5except that when the context otherwise requires, the term may
6refer to a single individual or other described entity.
7 "Principal dwelling" means a residential structure that
8contains one to 4 units, whether or not that structure is
9attached to real property. "Principal dwelling" includes an
10individual condominium unit, cooperative unit, manufactured
11home, mobile home, and trailer, if it is used as a residence.
12 "Principal office" means the actual, physical business
13address, which shall not be a post office box or a virtual
14business address, of a registrant, at which (i) the Department
15may contact the registrant and (ii) records required under
16this Act are maintained.
17 "Qualified to transact business in this State" means being
18in compliance with the requirements of the Business
19Corporation Act of 1983.
20 "Quality control review" means a review of an appraisal
21report for compliance and completeness, including grammatical,
22typographical, or other similar errors, unrelated to
23developing an opinion of value.
24 "Real estate" means an identified parcel or tract of land,
25including any improvements.
26 "Real estate related financial transaction" means any

SB3865 Engrossed- 553 -LRB102 24242 RJF 33473 b
1transaction 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
11inherent in the ownership of real estate.
12 "Secretary" means the Secretary of Financial and
13Professional Regulation.
14 "USPAP" means the Uniform Standards of Professional
15Appraisal Practice as adopted by the Appraisal Standards Board
16under Title XI.
17 "Valuation" means any estimate of the value of real
18property in connection with a creditor's decision to provide
19credit, including those values developed under a policy of a
20government sponsored enterprise or by an automated valuation
21model or other methodology or mechanism.
22 "Written notice" means a communication transmitted by mail
23or by electronic means that can be verified between an
24appraisal management company and a licensed or certified real
25estate 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
2changing 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
5residence in this State and lives therein, including any
6person who is a migrant worker, may qualify for medical
7assistance. A person who, while temporarily in this State,
8suffers injury or illness endangering his life and health and
9necessitating emergency care, may also qualify.
10 Temporary absence from the State shall not disqualify a
11person from maintaining his eligibility under this Article.
12 As used in this Section, "migrant worker" means any person
13residing temporarily and employed in Illinois who moves
14seasonally from one place to another for the purpose of
15employment in agricultural activities, including the planting,
16raising or harvesting of any agricultural or horticultural
17commodities and the handling, packing or processing of such
18commodities on the farm where produced or at the point of first
19processing, in animal husbandry, or in other activities
20connected with the care of animals. Dependents of such person
21shall be considered eligible if they are living with the
22person during his or her temporary residence and employment in
23Illinois.
24 In order to be eligible for medical assistance under this

SB3865 Engrossed- 555 -LRB102 24242 RJF 33473 b
1section, each migrant worker shall show proof of citizenship
2or legal noncitizen alien status.
3(Source: P.A. 81-746.)
4 Section 135. The Housing Development and Construction Act
5is 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
8shall be deposited in a separate fund and, subject to the
9approval of the Department of Commerce and Economic
10Opportunity, may be used for any or all of the following
11purposes as the needs of the community may require: the
12acquisition of land by purchase, gift or condemnation and the
13improvement thereof, the purchase and installation of
14temporary housing facilities, the construction of housing
15units for rent or sale to veterans, the families of deceased
16servicemen, and for persons and families who by reason of
17overcrowded housing conditions or displacement by eviction,
18fires or other calamities, or slum clearance or other private
19or public project involving relocation, are in urgent need of
20safe and sanitary housing, the making of grants in connection
21with the sale or lease of real property as provided in the
22following paragraph of this section, and for any and all
23purposes authorized by the "Housing Authorities Act," approved
24March 19, 1934, as amended, including administrative expenses

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1of the housing authorities in relation to the aforesaid
2objectives, to the extent and for the purposes authorized and
3approved by the Department of Commerce and Economic
4Opportunity. Each housing authority is vested with power to
5exercise the right of eminent domain for the purposes
6authorized by this Act. Condemnation proceedings instituted by
7any such authority shall be in all respects in the manner
8provided for the exercise of the right of eminent domain under
9the Eminent Domain Act.
10 In addition to the foregoing, and for the purpose of
11facilitating the development and construction of housing,
12housing authorities may, with the approval of the Department
13of Commerce and Economic Opportunity, enter into contracts and
14agreements for the sale or lease of real property acquired by
15the Authority through the use of the grant hereunder, and may
16sell or lease such property to (1) housing corporations
17operating under "An Act in relation to housing," approved July
1812, 1933, as amended; (2) neighborhood redevelopment
19corporations operating under the "Neighborhood Redevelopment
20Corporation Law," approved July 9, 1941; (3) insurance
21companies operating under Article VIII of the Illinois
22Insurance Code; (4) non-profit corporations organized for the
23purpose of constructing, managing and operating housing
24projects and the improvement of housing conditions, including
25the sale or rental of housing units to persons in need thereof;
26or (5) to any other individual, association or corporation,

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

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

SB3865 Engrossed- 559 -LRB102 24242 RJF 33473 b
1acquired in such municipality by the housing authority until
2such time as the housing authority has advised the governing
3body of such municipality of the description of the real
4property, or interest therein, proposed to be acquired, and
5the governing body of the municipality has approved the
6acquisition 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
9is 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
12expedient transfer and sell the fee simple title, or such
13lesser estate as the Department may have acquired, or as may
14theretofore have been acquired by a land clearance commission,
15to all or any part of the real property within the area of a
16redevelopment project not disposed of in accordance with
17Sections 15, 16, and 17 hereof to (1) Neighborhood
18Redevelopment Corporations operating under the "Neighborhood
19Redevelopment Corporation Law," approved July 9, 1941, as
20amended, (2) Insurance Companies operating under Section 125a
21of the "Illinois Insurance Code," approved June 29, 1937, as
22amended, (3) any individual, association, or corporation,
23organized under the laws of this State or of any other State or
24country, which may legally make such investments in this

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

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

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

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1provided 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
20under paragraph (2).
21 "Active service without pay" means active service
22performed under any authority in which base pay is not
23received regardless of other allowances.
24 "Annual training" means any active duty performed under
25Section 10147 or 12301(b) of Title 10 of the United States Code
26or 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,
2whether active or inactive, based on rank and time in service.
3It does not include the addition of conditional funds for
4specific purposes such as allowances, incentive and special
5pay. Base pay, also known as basic pay, can be determined by
6referencing the appropriate military pay chart covering the
7time period in question located on the federal Defense Finance
8and Accounting Services website or as reflected on a federal
9Military Leave and Earnings Statement.
10 "Benefits" includes, but is not limited to, the terms,
11conditions, or privileges of employment, including any
12advantage, profit, privilege, gain, status, account, or
13interest, including wages or salary for work performed, that
14accrues by reason of an employment contract or agreement or an
15employer policy, plan, or practice and includes rights and
16benefits under a pension plan, a health plan, an employee
17stock ownership plan, insurance coverage and awards, bonuses,
18severance pay, supplemental unemployment benefits, vacations,
19and the opportunity to select work hours or location of
20employment.
21 "Differential compensation" means pay due when the
22employee's daily rate of compensation for military service is
23less than his or her daily rate of compensation as a public
24employee.
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
1permanent resident noncitizen alien of the United States
2employed in a workplace that the State has legal authority to
3regulate business and employment. "Employee" does not include
4an independent contractor.
5 "Employer" means any person, institution, organization, or
6other entity that pays salary or wages for work performed or
7that 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
19drills, consisting of regularly scheduled unit training
20assemblies, additional training assemblies, periods of
21appropriate duty or equivalent training, and any special
22additional duties authorized for reserve component personnel
23by appropriate military authority. "Inactive duty" does not
24include active duty.
25 "Military leave" means a furlough or leave of absence
26while performing active service. It cannot be substituted for

SB3865 Engrossed- 567 -LRB102 24242 RJF 33473 b
1accrued vacation, annual, or similar leave with pay except at
2the sole discretion of the service member employee. It is not a
3benefit of employment that is requested but a legal
4requirement 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
23full-time employee of the State of Illinois, a unit of local
24government, a public institution of higher education as
25defined in Section 1 of the Board of Higher Education Act, or a
26school district, other than an independent contractor.

SB3865 Engrossed- 568 -LRB102 24242 RJF 33473 b
1 "Reserve component" means the reserve components of
2Illinois and the United States Armed Forces regardless of
3status.
4 "Service member" means any person who is a member of a
5military service.
6 "State active duty" means full-time State-funded military
7duty under the command and control of the Governor and subject
8to the Military Code of Illinois.
9 "Unit of local government" means any city, village, town,
10county, or special district.
11(Source: P.A. 100-1101, eff. 1-1-19.)
12 Section 150. The Firearm Owners Identification Card Act is
13amended 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
24of a prescribed controlled substance under the direction and

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1authority of a physician or other person authorized to
2prescribe the controlled substance when the controlled
3substance is used in the prescribed manner.
4 "Adjudicated as a person with a mental disability" means
5the person is the subject of a determination by a court, board,
6commission or other lawful authority that the person, as a
7result of marked subnormal intelligence, or mental illness,
8mental 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;

SB3865 Engrossed- 570 -LRB102 24242 RJF 33473 b
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.

SB3865 Engrossed- 571 -LRB102 24242 RJF 33473 b
1 "Clinical psychologist" has the meaning provided in
2Section 1-103 of the Mental Health and Developmental
3Disabilities Code.
4 "Controlled substance" means a controlled substance or
5controlled substance analog as defined in the Illinois
6Controlled Substances Act.
7 "Counterfeit" means to copy or imitate, without legal
8authority, with intent to deceive.
9 "Federally licensed firearm dealer" means a person who is
10licensed as a federal firearms dealer under Section 923 of the
11federal Gun Control Act of 1968 (18 U.S.C. 923).
12 "Firearm" means any device, by whatever name known, which
13is designed to expel a projectile or projectiles by the action
14of an explosion, expansion of gas or escape of gas; excluding,
15however:
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

SB3865 Engrossed- 572 -LRB102 24242 RJF 33473 b
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
9shotgun shell, by whatever name known, which is designed to be
10used 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

SB3865 Engrossed- 573 -LRB102 24242 RJF 33473 b
1event or function, including parking areas for the event or
2function, that is sponsored to facilitate the purchase, sale,
3transfer, or exchange of firearms as described in this
4Section. Nothing in this definition shall be construed to
5exclude a gun show held in conjunction with competitive
6shooting events at the World Shooting Complex sanctioned by a
7national governing body in which the sale or transfer of
8firearms is authorized under subparagraph (5) of paragraph (g)
9of subsection (A) of Section 24-3 of the Criminal Code of 2012.
10 Unless otherwise expressly stated, "gun show" does not
11include training or safety classes, competitive shooting
12events, such as rifle, shotgun, or handgun matches, trap,
13skeet, or sporting clays shoots, dinners, banquets, raffles,
14or any other event where the sale or transfer of firearms is
15not the primary course of business.
16 "Gun show promoter" means a person who organizes or
17operates a gun show.
18 "Gun show vendor" means a person who exhibits, sells,
19offers for sale, transfers, or exchanges any firearms at a gun
20show, regardless of whether the person arranges with a gun
21show promoter for a fixed location from which to exhibit,
22sell, offer for sale, transfer, or exchange any firearm.
23 "Involuntarily admitted" has the meaning as prescribed in
24Sections 1-119 and 1-119.1 of the Mental Health and
25Developmental Disabilities Code.
26 "Mental health facility" means any licensed private

SB3865 Engrossed- 574 -LRB102 24242 RJF 33473 b
1hospital or hospital affiliate, institution, or facility, or
2part thereof, and any facility, or part thereof, operated by
3the State or a political subdivision thereof which provides
4provide treatment of persons with mental illness and includes
5all hospitals, institutions, clinics, evaluation facilities,
6mental health centers, colleges, universities, long-term care
7facilities, and nursing homes, or parts thereof, which provide
8treatment of persons with mental illness whether or not the
9primary purpose is to provide treatment of persons with mental
10illness.
11 "National governing body" means a group of persons who
12adopt rules and formulate policy on behalf of a national
13firearm sporting organization.
14 "Noncitizen" means a person who is not a citizen of the
15United States, but is a person who is a foreign-born person who
16lives in the United States, has not been naturalized, and is
17still 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
6with a disability which is attributable to any other condition
7which results in impairment similar to that caused by an
8intellectual disability and which requires services similar to
9those required by persons with intellectual disabilities. The
10disability must originate before the age of 18 years, be
11expected to continue indefinitely, and constitute a
12substantial disability. This disability results, in the
13professional opinion of a physician, clinical psychologist, or
14qualified examiner, in significant functional limitations in 3
15or 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
22with a significantly subaverage general intellectual
23functioning which exists concurrently with impairment in
24adaptive behavior and which originates before the age of 18
25years.
26 "Physician" has the meaning as defined in Section 1-120 of

SB3865 Engrossed- 576 -LRB102 24242 RJF 33473 b
1the Mental Health and Developmental Disabilities Code.
2 "Protective order" means any orders of protection issued
3under the Illinois Domestic Violence Act of 1986, stalking no
4contact orders issued under the Stalking No Contact Order Act,
5civil no contact orders issued under the Civil No Contact
6Order Act, and firearms restraining orders issued under the
7Firearms Restraining Order Act.
8 "Qualified examiner" has the meaning provided in Section
91-122 of the Mental Health and Developmental Disabilities
10Code.
11 "Sanctioned competitive shooting event" means a shooting
12contest officially recognized by a national or state shooting
13sport association, and includes any sight-in or practice
14conducted in conjunction with the event.
15 "School administrator" means the person required to report
16under the School Administrator Reporting of Mental Health
17Clear and Present Danger Determinations Law.
18 "Stun gun or taser" has the meaning ascribed to it in
19Section 24-1 of the Criminal Code of 2012.
20(Source: P.A. 102-237, eff. 1-1-22; 102-538, eff. 8-20-21;
21revised 10-6-21.)
22 (430 ILCS 65/4) (from Ch. 38, par. 83-4)
23 Sec. 4. Application for Firearm Owner's Identification
24Cards.
25 (a) Each applicant for a Firearm Owner's Identification

SB3865 Engrossed- 577 -LRB102 24242 RJF 33473 b
1Card 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

SB3865 Engrossed- 578 -LRB102 24242 RJF 33473 b
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;

SB3865 Engrossed- 580 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 581 -LRB102 24242 RJF 33473 b
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
9Card who is over the age of 18 shall furnish to the Illinois
10State Police either his or her Illinois driver's license
11number or Illinois Identification Card number, except as
12provided in subsection (a-10).
13 (a-10) Each applicant for a Firearm Owner's Identification
14Card, who is employed as a law enforcement officer, an armed
15security officer in Illinois, or by the United States Military
16permanently assigned in Illinois and who is not an Illinois
17resident, shall furnish to the Illinois State Police his or
18her driver's license number or state identification card
19number from his or her state of residence. The Illinois State
20Police may adopt rules to enforce the provisions of this
21subsection (a-10).
22 (a-15) If an applicant applying for a Firearm Owner's
23Identification Card moves from the residence address named in
24the application, he or she shall immediately notify in a form
25and manner prescribed by the Illinois State Police of that
26change of address.

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

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1one-time fee for conducting the criminal history record check,
2which shall be deposited into the State Police Services Fund
3and shall not exceed the actual cost of the State and national
4criminal history record check.
5 (a-26) The Illinois State Police shall research, explore,
6and report to the General Assembly by January 1, 2022 on the
7feasibility of permitting voluntarily submitted fingerprints
8obtained for purposes other than Firearm Owner's
9Identification Card enforcement that are contained in the
10Illinois State Police database for purposes of this Act.
11 (b) Each application form shall include the following
12statement printed in bold type: "Warning: Entering false
13information on an application for a Firearm Owner's
14Identification Card is punishable as a Class 2 felony in
15accordance with subsection (d-5) of Section 14 of the Firearm
16Owners Identification Card Act.".
17 (c) Upon such written consent, pursuant to Section 4,
18paragraph (a)(2)(i), the parent or legal guardian giving the
19consent shall be liable for any damages resulting from the
20applicant's use of firearms or firearm ammunition.
21(Source: P.A. 101-80, eff. 7-12-19; 102-237, eff. 1-1-22;
22102-538, 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
25State Police has authority to deny an application for or to

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1revoke and seize a Firearm Owner's Identification Card
2previously issued under this Act only if the Illinois State
3Police Department finds that the applicant or the person to
4whom 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;

SB3865 Engrossed- 586 -LRB102 24242 RJF 33473 b
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;

SB3865 Engrossed- 587 -LRB102 24242 RJF 33473 b
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);

SB3865 Engrossed- 588 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 589 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 590 -LRB102 24242 RJF 33473 b
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
17Identification Card, the Illinois State Police shall provide
18notice to the person and the person shall comply with Section
199.5 of this Act.
20(Source: P.A. 101-80, eff. 7-12-19; 102-538, eff. 8-20-21;
21102-645, eff. 1-1-22; revised 10-14-21.)
22 Section 155. The Criminal Code of 2012 is amended by
23changing Section 17-6.5 as follows:
24 (720 ILCS 5/17-6.5)

SB3865 Engrossed- 591 -LRB102 24242 RJF 33473 b
1 Sec. 17-6.5. Persons under deportation order;
2ineligibility for benefits.
3 (a) An individual against whom a United States Immigration
4Judge has issued an order of deportation which has been
5affirmed by the Board of Immigration Review, as well as an
6individual who appeals such an order pending appeal, under
7paragraph 19 of Section 241(a) of the Immigration and
8Nationality Act relating to persecution of others on account
9of race, religion, national origin or political opinion under
10the direction of or in association with the Nazi government of
11Germany or its allies, shall be ineligible for the following
12benefits 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.

SB3865 Engrossed- 592 -LRB102 24242 RJF 33473 b
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
5received 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
26offense under this Section, all of the monetary value of the

SB3865 Engrossed- 593 -LRB102 24242 RJF 33473 b
1benefits received as a result of the unlawful act, practice,
2or 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
5commenced by the Attorney General in the circuit court of
6Sangamon County or the State's Attorney of the county of
7residence of the person described in subsection (a).
8 (e) An individual described in subsection (a) who has been
9deported shall be restored to any benefits which that
10individual has been denied under State law pursuant to
11subsection (a) if (i) the Attorney General of the United
12States has issued an order cancelling deportation and has
13adjusted the status of the individual to that of a noncitizen
14an alien lawfully admitted for permanent residence in the
15United States or (ii) the country to which the individual has
16been deported adjudicates or exonerates the individual in a
17judicial or administrative proceeding as not being guilty of
18the persecution of others on account of race, religion,
19national origin, or political opinion under the direction of
20or in association with the Nazi government of Germany or its
21allies.
22(Source: P.A. 99-143, eff. 7-27-15.)
23 Section 160. The Prevention of Cigarette and Electronic
24Cigarette Sales to Persons under 21 Years of Age Act is amended
25by changing Section 2 as follows:

SB3865 Engrossed- 594 -LRB102 24242 RJF 33473 b
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
4smoking made wholly or in part of tobacco irrespective of size
5or shape and whether or not the tobacco is flavored,
6adulterated, or mixed with any other ingredient, and the
7wrapper or cover of which is made of paper or any other
8substance or material except whole leaf tobacco.
9 "Clear and conspicuous statement" means the statement is
10of sufficient type size to be clearly readable by the
11recipient of the communication.
12 "Consumer" means an individual who acquires or seeks to
13acquire cigarettes or electronic cigarettes for personal use.
14 "Delivery sale" means any sale of cigarettes or electronic
15cigarettes 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

SB3865 Engrossed- 595 -LRB102 24242 RJF 33473 b
1 the cigarettes or electronic cigarettes.
2 "Delivery service" means any person (other than a person
3that makes a delivery sale) who delivers to the consumer the
4cigarettes 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,
16any electronic nicotine delivery system, electronic cigar,
17electronic cigarillo, electronic pipe, electronic hookah, vape
18pen, or similar product or device, and any component, part, or
19accessory of a device used during the operation of the device,
20even if the part or accessory was sold separately. "Electronic
21cigarette" does not include: cigarettes, as defined in Section
221 of the Cigarette Tax Act; any product approved by the United
23States Food and Drug Administration for sale as a tobacco
24cessation product, a tobacco dependence product, or for other
25medical purposes that is marketed and sold solely for that
26approved purpose; any asthma inhaler prescribed by a physician

SB3865 Engrossed- 596 -LRB102 24242 RJF 33473 b
1for that condition that is marketed and sold solely for that
2approved purpose; any device that meets the definition of
3cannabis paraphernalia under Section 1-10 of the Cannabis
4Regulation and Tax Act; or any cannabis product sold by a
5dispensing organization pursuant to the Cannabis Regulation
6and Tax Act or the Compassionate Use of Medical Cannabis
7Program Act.
8 "Government-issued identification" means a State driver's
9license, State identification card, passport, a military
10identification or an official naturalization or immigration
11document, 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
14electronic cigarettes through the United States Postal
15Service.
16 "Out-of-state sale" means a sale of cigarettes or
17electronic cigarettes to a consumer located outside of this
18State where the consumer submits the order for such sale by
19means of a telephonic or other method of voice transmission,
20the mails or any other delivery service, facsimile
21transmission, or the Internet or other online service and
22where the cigarettes or electronic cigarettes are delivered by
23use of the mails or other delivery service.
24 "Person" means any individual, corporation, partnership,
25limited liability company, association, or other organization
26that 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
2cartons of cigarettes or electronic cigarettes are shipped in
3connection with a delivery sale.
4 "Shipping documents" means bills of lading, air bills, or
5any other documents used to evidence the undertaking by a
6delivery service to deliver letters, packages, or other
7containers.
8(Source: P.A. 102-575, eff. 1-1-22.)
9 Section 165. The Code of Criminal Procedure of 1963 is
10amended by changing Section 113-8 as follows:
11 (725 ILCS 5/113-8)
12 Sec. 113-8. Advisement concerning status as a noncitizen
13an alien.
14 (a) Before the acceptance of a plea of guilty, guilty but
15mentally ill, or nolo contendere to a misdemeanor or felony
16offense, the court shall give the following advisement to the
17defendant in open court:
18 "If you are not a citizen of the United States, you are
19hereby advised that conviction of the offense for which you
20have been charged may have the consequence of deportation,
21exclusion from admission to the United States, or denial of
22naturalization under the laws of the United States.".
23 (b) If the defendant is arraigned on or after the
24effective date of this amendatory Act of the 101st General

SB3865 Engrossed- 598 -LRB102 24242 RJF 33473 b
1Assembly, and the court fails to advise the defendant as
2required by subsection (a) of this Section, and the defendant
3shows that conviction of the offense to which the defendant
4pleaded guilty, guilty but mentally ill, or nolo contendere
5may have the consequence for the defendant of deportation,
6exclusion from admission to the United States, or denial of
7naturalization under the laws of the United States, the court,
8upon the defendant's motion, shall vacate the judgment and
9permit the defendant to withdraw the plea of guilty, guilty
10but mentally ill, or nolo contendere and enter a plea of not
11guilty. The motion shall be filed within 2 years of the date of
12the defendant's conviction.
13(Source: P.A. 101-409, eff. 1-1-20.)
14 Section 170. The Unified Code of Corrections is amended by
15changing 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
19responsibilities which are otherwise provided by law, the
20Department 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

SB3865 Engrossed- 603 -LRB102 24242 RJF 33473 b
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

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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.

SB3865 Engrossed- 609 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 610 -LRB102 24242 RJF 33473 b
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,
181998, consider building and operating a correctional facility
19within 100 miles of a county of over 2,000,000 inhabitants,
20especially a facility designed to house juvenile participants
21in the impact incarceration program.
22 (3) When the Department lets bids for contracts for
23medical services to be provided to persons committed to
24Department facilities by a health maintenance organization,
25medical service corporation, or other health care provider,
26the bid may only be let to a health care provider that has

SB3865 Engrossed- 611 -LRB102 24242 RJF 33473 b
1obtained an irrevocable letter of credit or performance bond
2issued by a company whose bonds have an investment grade or
3higher rating by a bond rating organization.
4 (4) When the Department lets bids for contracts for food
5or commissary services to be provided to Department
6facilities, the bid may only be let to a food or commissary
7services provider that has obtained an irrevocable letter of
8credit or performance bond issued by a company whose bonds
9have an investment grade or higher rating by a bond rating
10organization.
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
13Executive Order 1 (2012) Implementation Act, all of the
14powers, duties, rights, and responsibilities related to State
15healthcare purchasing under this Code that were transferred
16from the Department of Corrections to the Department of
17Healthcare and Family Services by Executive Order 3 (2005) are
18transferred back to the Department of Corrections; however,
19powers, duties, rights, and responsibilities related to State
20healthcare purchasing under this Code that were exercised by
21the Department of Corrections before the effective date of
22Executive Order 3 (2005) but that pertain to individuals
23resident in facilities operated by the Department of Juvenile
24Justice are transferred to the Department of Juvenile Justice.
25(Source: P.A. 101-235, eff. 1-1-20; 102-350, eff. 8-13-21;
26102-535, eff. 1-1-22; 102-538, eff. 8-20-21; revised

SB3865 Engrossed- 612 -LRB102 24242 RJF 33473 b
110-15-21.)
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
8or conditional discharge shall not be imposed for the
9following offenses. The court shall sentence the offender to
10not less than the minimum term of imprisonment set forth in
11this Code for the following offenses, and may order a fine or
12restitution or both in conjunction with such term of
13imprisonment:
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.

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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
19consecutive days or 30 days of community service shall be
20imposed for a violation of paragraph (c) of Section 6-303 of
21the Illinois Vehicle Code.
22 (4.1) (Blank).
23 (4.2) Except as provided in paragraphs (4.3) and (4.8) of
24this subsection (c), a minimum of 100 hours of community
25service shall be imposed for a second violation of Section
266-303 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
2hours of community service, as determined by the court, shall
3be imposed for a second violation of subsection (c) of Section
46-303 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
7of 30 days or 300 hours of community service, as determined by
8the court, shall be imposed for a third or subsequent
9violation of Section 6-303 of the Illinois Vehicle Code. The
10court may give credit toward the fulfillment of community
11service hours for participation in activities and treatment as
12determined by court services.
13 (4.5) A minimum term of imprisonment of 30 days shall be
14imposed for a third violation of subsection (c) of Section
156-303 of the Illinois Vehicle Code.
16 (4.6) Except as provided in paragraph (4.10) of this
17subsection (c), a minimum term of imprisonment of 180 days
18shall be imposed for a fourth or subsequent violation of
19subsection (c) of Section 6-303 of the Illinois Vehicle Code.
20 (4.7) A minimum term of imprisonment of not less than 30
21consecutive days, or 300 hours of community service, shall be
22imposed for a violation of subsection (a-5) of Section 6-303
23of the Illinois Vehicle Code, as provided in subsection (b-5)
24of that Section.
25 (4.8) A mandatory prison sentence shall be imposed for a
26second violation of subsection (a-5) of Section 6-303 of the

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

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

SB3865 Engrossed- 621 -LRB102 24242 RJF 33473 b
1permit, or privileges suspended for an additional 6 months
2after the expiration of the original 3-month suspension and
3until 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
8offense of ritualized abuse of a child may be sentenced to a
9term of natural life imprisonment.
10 (10) (Blank).
11 (11) The court shall impose a minimum fine of $1,000 for a
12first offense and $2,000 for a second or subsequent offense
13upon a person convicted of or placed on supervision for
14battery when the individual harmed was a sports official or
15coach at any level of competition and the act causing harm to
16the sports official or coach occurred within an athletic
17facility or within the immediate vicinity of the athletic
18facility at which the sports official or coach was an active
19participant of the athletic contest held at the athletic
20facility. For the purposes of this paragraph (11), "sports
21official" means a person at an athletic contest who enforces
22the rules of the contest, such as an umpire or referee;
23"athletic facility" means an indoor or outdoor playing field
24or recreational area where sports activities are conducted;
25and "coach" means a person recognized as a coach by the
26sanctioning 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
2supervision for a violation of Section 5-16 of the Boat
3Registration and Safety Act if that person has previously
4received a disposition of court supervision for a violation of
5that Section.
6 (13) A person convicted of or placed on court supervision
7for an assault or aggravated assault when the victim and the
8offender are family or household members as defined in Section
9103 of the Illinois Domestic Violence Act of 1986 or convicted
10of domestic battery or aggravated domestic battery may be
11required to attend a Partner Abuse Intervention Program under
12protocols set forth by the Illinois Department of Human
13Services under such terms and conditions imposed by the court.
14The costs of such classes shall be paid by the offender.
15 (d) In any case in which a sentence originally imposed is
16vacated, the case shall be remanded to the trial court. The
17trial court shall hold a hearing under Section 5-4-1 of this
18Code which may include evidence of the defendant's life, moral
19character and occupation during the time since the original
20sentence was passed. The trial court shall then impose
21sentence upon the defendant. The trial court may impose any
22sentence which could have been imposed at the original trial
23subject to Section 5-5-4 of this Code. If a sentence is vacated
24on appeal or on collateral attack due to the failure of the
25trier of fact at trial to determine beyond a reasonable doubt
26the existence of a fact (other than a prior conviction)

SB3865 Engrossed- 623 -LRB102 24242 RJF 33473 b
1necessary to increase the punishment for the offense beyond
2the statutory maximum otherwise applicable, either the
3defendant may be re-sentenced to a term within the range
4otherwise provided or, if the State files notice of its
5intention to again seek the extended sentence, the defendant
6shall be afforded a new trial.
7 (e) In cases where prosecution for aggravated criminal
8sexual abuse under Section 11-1.60 or 12-16 of the Criminal
9Code of 1961 or the Criminal Code of 2012 results in conviction
10of a defendant who was a family member of the victim at the
11time of the commission of the offense, the court shall
12consider the safety and welfare of the victim and may impose a
13sentence 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;

SB3865 Engrossed- 624 -LRB102 24242 RJF 33473 b
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
125-6-4; except where the court determines at the hearing that
13the defendant violated a condition of his or her probation
14restricting contact with the victim or other family members or
15commits another offense with the victim or other family
16members, the court shall revoke the defendant's probation and
17impose 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
2011-0.1 of the Criminal Code of 2012.
21 (f) (Blank).
22 (g) Whenever a defendant is convicted of an offense under
23Sections 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, 11-14,
2411-14.3, 11-14.4 except for an offense that involves keeping a
25place of juvenile prostitution, 11-15, 11-15.1, 11-16, 11-17,
2611-18, 11-18.1, 11-19, 11-19.1, 11-19.2, 12-13, 12-14,

SB3865 Engrossed- 625 -LRB102 24242 RJF 33473 b
112-14.1, 12-15, or 12-16 of the Criminal Code of 1961 or the
2Criminal Code of 2012, the defendant shall undergo medical
3testing to determine whether the defendant has any sexually
4transmissible disease, including a test for infection with
5human immunodeficiency virus (HIV) or any other identified
6causative agent of acquired immunodeficiency syndrome (AIDS).
7Any such medical test shall be performed only by appropriately
8licensed medical practitioners and may include an analysis of
9any bodily fluids as well as an examination of the defendant's
10person. Except as otherwise provided by law, the results of
11such test shall be kept strictly confidential by all medical
12personnel involved in the testing and must be personally
13delivered in a sealed envelope to the judge of the court in
14which the conviction was entered for the judge's inspection in
15camera. Acting in accordance with the best interests of the
16victim and the public, the judge shall have the discretion to
17determine to whom, if anyone, the results of the testing may be
18revealed. The court shall notify the defendant of the test
19results. The court shall also notify the victim if requested
20by the victim, and if the victim is under the age of 15 and if
21requested by the victim's parents or legal guardian, the court
22shall notify the victim's parents or legal guardian of the
23test results. The court shall provide information on the
24availability of HIV testing and counseling at Department of
25Public Health facilities to all parties to whom the results of
26the testing are revealed and shall direct the State's Attorney

SB3865 Engrossed- 626 -LRB102 24242 RJF 33473 b
1to provide the information to the victim when possible. The
2court shall order that the cost of any such test shall be paid
3by the county and may be taxed as costs against the convicted
4defendant.
5 (g-5) When an inmate is tested for an airborne
6communicable disease, as determined by the Illinois Department
7of Public Health, including, but not limited to, tuberculosis,
8the results of the test shall be personally delivered by the
9warden or his or her designee in a sealed envelope to the judge
10of the court in which the inmate must appear for the judge's
11inspection in camera if requested by the judge. Acting in
12accordance with the best interests of those in the courtroom,
13the judge shall have the discretion to determine what if any
14precautions need to be taken to prevent transmission of the
15disease in the courtroom.
16 (h) Whenever a defendant is convicted of an offense under
17Section 1 or 2 of the Hypodermic Syringes and Needles Act, the
18defendant shall undergo medical testing to determine whether
19the defendant has been exposed to human immunodeficiency virus
20(HIV) or any other identified causative agent of acquired
21immunodeficiency syndrome (AIDS). Except as otherwise provided
22by law, the results of such test shall be kept strictly
23confidential by all medical personnel involved in the testing
24and must be personally delivered in a sealed envelope to the
25judge of the court in which the conviction was entered for the
26judge's inspection in camera. Acting in accordance with the

SB3865 Engrossed- 627 -LRB102 24242 RJF 33473 b
1best interests of the public, the judge shall have the
2discretion to determine to whom, if anyone, the results of the
3testing may be revealed. The court shall notify the defendant
4of a positive test showing an infection with the human
5immunodeficiency virus (HIV). The court shall provide
6information on the availability of HIV testing and counseling
7at Department of Public Health facilities to all parties to
8whom the results of the testing are revealed and shall direct
9the State's Attorney to provide the information to the victim
10when possible. The court shall order that the cost of any such
11test shall be paid by the county and may be taxed as costs
12against the convicted defendant.
13 (i) All fines and penalties imposed under this Section for
14any violation of Chapters 3, 4, 6, and 11 of the Illinois
15Vehicle Code, or a similar provision of a local ordinance, and
16any violation of the Child Passenger Protection Act, or a
17similar provision of a local ordinance, shall be collected and
18disbursed by the circuit clerk as provided under the Criminal
19and Traffic Assessment Act.
20 (j) In cases when prosecution for any violation of Section
2111-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, 11-6, 11-8, 11-9,
2211-11, 11-14, 11-14.3, 11-14.4, 11-15, 11-15.1, 11-16, 11-17,
2311-17.1, 11-18, 11-18.1, 11-19, 11-19.1, 11-19.2, 11-20.1,
2411-20.1B, 11-20.3, 11-21, 11-30, 11-40, 12-13, 12-14, 12-14.1,
2512-15, or 12-16 of the Criminal Code of 1961 or the Criminal
26Code of 2012, any violation of the Illinois Controlled

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

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

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1mentally incapable of completing the educational or vocational
2program.
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
6the United States an alien as defined by the Immigration and
7Nationality Act, is convicted of any felony or misdemeanor
8offense, the court after sentencing the defendant may, upon
9motion of the State's Attorney, hold sentence in abeyance and
10remand the defendant to the custody of the Attorney General of
11the United States or his or her designated agent to be deported
12when:
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
20this Chapter V.
21 (B) If the defendant has already been sentenced for a
22felony or misdemeanor offense, or has been placed on probation
23under Section 10 of the Cannabis Control Act, Section 410 of
24the Illinois Controlled Substances Act, or Section 70 of the
25Methamphetamine Control and Community Protection Act, the
26court may, upon motion of the State's Attorney to suspend the

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1sentence imposed, commit the defendant to the custody of the
2Attorney General of the United States or his or her designated
3agent 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
11are 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
14sentenced under this Section returns to the jurisdiction of
15the United States, the defendant shall be recommitted to the
16custody of the county from which he or she was sentenced.
17Thereafter, the defendant shall be brought before the
18sentencing court, which may impose any sentence that was
19available under Section 5-5-3 at the time of initial
20sentencing. In addition, the defendant shall not be eligible
21for additional earned sentence credit as provided under
22Section 3-6-3.
23 (m) A person convicted of criminal defacement of property
24under Section 21-1.3 of the Criminal Code of 1961 or the
25Criminal 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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1ordered to perform community service that may include cleanup,
2removal, or painting over the defacement.
3 (n) The court may sentence a person convicted of a
4violation of Section 12-19, 12-21, 16-1.3, or 17-56, or
5subsection (a) or (b) of Section 12-4.4a, of the Criminal Code
6of 1961 or the Criminal Code of 2012 (i) to an impact
7incarceration program if the person is otherwise eligible for
8that program under Section 5-8-1.1, (ii) to community service,
9or (iii) if the person has a substance use disorder, as defined
10in the Substance Use Disorder Act, to a treatment program
11licensed under that Act.
12 (o) Whenever a person is convicted of a sex offense as
13defined in Section 2 of the Sex Offender Registration Act, the
14defendant's driver's license or permit shall be subject to
15renewal on an annual basis in accordance with the provisions
16of license renewal established by the Secretary of State.
17(Source: P.A. 101-81, eff. 7-12-19; 102-168, eff. 7-27-21;
18102-531, eff. 1-1-22; revised 10-12-21.)
19 Section 175. The Frauds Act is amended by changing Section
2012 as follows:
21 (740 ILCS 80/12) (from Ch. 59, par. 12)
22 Sec. 12. When any lands, tenements or hereditaments, or
23any rents or profits out of the same, shall descend to any
24heir, or be devised to any devisee, and the personal estate of

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1the ancestor of such heir or devisor of such devisee shall be
2insufficient to discharge the just demands against such
3ancestor, or devisor's estate, such heir or devisee shall be
4liable to the creditor of their ancestor or devisor to the full
5amount of the lands, tenements or hereditaments, or rents and
6profits out of the same, as may descend or be devised to the
7said heir or devisee; and in all cases where any heir or
8devisee shall be liable to pay the debts of his executor or
9devisor, in regard of any lands, tenements or hereditaments,
10or any rent or profit arising out of the same, descending or
11being devised to him, and shall sell, transfer, alien or make
12over the same before any action brought, or process sued out
13against him, such heir at law or devisee shall be answerable
14for such debts to the value of the said lands, tenements and
15hereditaments, rents or profits so by him transferred aliened
16or made over; and executions may be taken out upon any judgment
17so obtained against such heir or devisee, to the value of the
18said lands, tenements and hereditaments, rents and profits,
19out of the same, as if the same were his own proper debts,
20saving and excepting that the lands and tenements, rents and
21profits, by him bona fide transferred aliened, before the
22action 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
25amended 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
3withholding provisions; income withholding notice.
4 (a) In addition to any content required under other laws,
5every order for support entered on or after July 1, 1997,
6shall:
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
7of the Circuit Court shall provide a copy of the order to the
8obligor and shall make copies available to the obligee and
9public 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

SB3865 Engrossed- 636 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 637 -LRB102 24242 RJF 33473 b
1 payment of support to the State Disbursement Unit.
2 (d) The accrual of a delinquency as a condition for
3service of an income withholding notice, under the exception
4to immediate withholding in subsection (a) of this Section,
5shall apply only to the initial service of an income
6withholding notice on a payor of the obligor.
7 (e) Notwithstanding the exception to immediate withholding
8contained in subsection (a) of this Section, if the court
9finds at the time of any hearing that an arrearage has accrued,
10the court shall order immediate service of an income
11withholding notice upon the payor.
12 (f) If the order for support, under the exception to
13immediate withholding contained in subsection (a) of this
14Section, provides that an income withholding notice is to be
15prepared and served only if the obligor becomes delinquent in
16paying the order for support, the obligor may execute a
17written waiver of that condition and request immediate service
18on the payor.
19 (g) The obligee or public office may serve the income
20withholding notice on the payor or its superintendent,
21manager, or other agent by ordinary mail or certified mail
22return receipt requested, by facsimile transmission or other
23electronic means, by personal delivery, or by any method
24provided by law for service of a summons. At the time of
25service on the payor and as notice that withholding has
26commenced, the obligee or public office shall serve a copy of

SB3865 Engrossed- 638 -LRB102 24242 RJF 33473 b
1the income withholding notice on the obligor by ordinary mail
2addressed to his or her last known address. A copy of an income
3withholding notice and proof of service shall be filed with
4the Clerk of the Circuit Court only when necessary in
5connection with a petition to contest, modify, suspend,
6terminate, or correct an income withholding notice, an action
7to enforce income withholding against a payor, or the
8resolution of other disputes involving an income withholding
9notice. The changes made to this subsection by this amendatory
10Act of the 96th General Assembly apply on and after September
111, 2009.
12 (h) At any time after the initial service of an income
13withholding notice, any other payor of the obligor may be
14served with the same income withholding notice without further
15notice to the obligor. A copy of the income withholding notice
16together with a proof of service on the other payor shall be
17filed with the Clerk of the Circuit Court.
18 (i) New service of an income withholding notice is not
19required in order to resume withholding of income in the case
20of an obligor with respect to whom an income withholding
21notice was previously served on the payor if withholding of
22income was terminated because of an interruption in the
23obligor'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

SB3865 Engrossed- 639 -LRB102 24242 RJF 33473 b
1by changing the title of the Act and Sections 0.01, 7, and 8 as
2follows:
3 (765 ILCS 60/Act title)
4 An Act concerning the right of noncitizens aliens to
5acquire 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
8Property 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
12dispose of real and personal property in the same manner and to
13the same extent as natural born citizens of the United States,
14and the personal estate of a noncitizen an alien dying
15intestate shall be distributed in the same manner as the
16estates of natural born citizens, and all persons interested
17in such estate shall be entitled to proper distributive shares
18thereof under the laws of this state, whether they are
19noncitizens aliens or not.
20 This amendatory Act of 1992 does not apply to the
21Agricultural Foreign Investment Disclosure Act.
22(Source: P.A. 87-1101.)

SB3865 Engrossed- 640 -LRB102 24242 RJF 33473 b
1 (765 ILCS 60/8) (from Ch. 6, par. 8)
2 Sec. 8. An act in regard to noncitizens aliens and to
3restrict their right to acquire and hold real and personal
4estate and to provide for the disposition of the lands now
5owned by non-resident noncitizens aliens, approved June 16,
61887, and in force July 1, 1887, and all other acts and parts
7of 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
10amended by changing the title of the Act and Sections 0.01 and
111 as follows:
12 (765 ILCS 725/Act title)
13 An Act to prevent noncitizen alien landlords from
14including the payment of taxes in the rent of farm lands as a
15part 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
18Property 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
22parol, by which any lands or tenements therein are demised or

SB3865 Engrossed- 641 -LRB102 24242 RJF 33473 b
1leased by any noncitizen alien or his agents for the purpose of
2farming, cultivation or the raising of crops thereon, shall
3contain any provision requiring the tenant or other person for
4him, to pay taxes on said lands or tenements, or any part
5thereof, and all such provisions, agreements and leases so
6made are declared void as to the taxes aforesaid. If any
7noncitizen alien landlord or his agents shall receive in
8advance or at any other time any sum of money or article of
9value from any tenant in lieu of such taxes, directly or
10indirectly, the same may be recovered back by such tenant
11before any court having jurisdiction of the amount thereof,
12and all provisions or agreements in writing or otherwise to
13pay such taxes shall be held in all courts of this state to be
14void.
15(Source: P.A. 81-1509.)
16 Section 195. The Illinois Human Rights Act is amended by
17changing Section 2-101 as follows:
18 (775 ILCS 5/2-101)
19 Sec. 2-101. Definitions. The following definitions are
20applicable 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;

SB3865 Engrossed- 642 -LRB102 24242 RJF 33473 b
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:

SB3865 Engrossed- 643 -LRB102 24242 RJF 33473 b
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;

SB3865 Engrossed- 644 -LRB102 24242 RJF 33473 b
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
17public and private employment agencies and any person, labor
18organization, or labor union having a hiring hall or hiring
19office regularly undertaking, with or without compensation, to
20procure opportunities to work, or to procure, recruit, refer
21or place employees.
22 (D) Labor Organization. "Labor Organization" includes any
23organization, labor union, craft union, or any voluntary
24unincorporated association designed to further the cause of
25the rights of union labor which is constituted for the
26purpose, in whole or in part, of collective bargaining or of

SB3865 Engrossed- 645 -LRB102 24242 RJF 33473 b
1dealing with employers concerning grievances, terms or
2conditions of employment, or apprenticeships or applications
3for apprenticeships, or of other mutual aid or protection in
4connection with employment, including apprenticeships or
5applications for apprenticeships.
6 (E) Sexual Harassment. "Sexual harassment" means any
7unwelcome sexual advances or requests for sexual favors or any
8conduct of a sexual nature when (1) submission to such conduct
9is made either explicitly or implicitly a term or condition of
10an individual's employment, (2) submission to or rejection of
11such conduct by an individual is used as the basis for
12employment decisions affecting such individual, or (3) such
13conduct has the purpose or effect of substantially interfering
14with an individual's work performance or creating an
15intimidating, hostile or offensive working environment.
16 For purposes of this definition, the phrase "working
17environment" is not limited to a physical location an employee
18is assigned to perform his or her duties.
19 (E-1) Harassment. "Harassment" means any unwelcome conduct
20on the basis of an individual's actual or perceived race,
21color, religion, national origin, ancestry, age, sex, marital
22status, order of protection status, disability, military
23status, sexual orientation, pregnancy, unfavorable discharge
24from military service, citizenship status, or work
25authorization status that has the purpose or effect of
26substantially interfering with the individual's work

SB3865 Engrossed- 646 -LRB102 24242 RJF 33473 b
1performance or creating an intimidating, hostile, or offensive
2working environment. For purposes of this definition, the
3phrase "working environment" is not limited to a physical
4location an employee is assigned to perform his or her duties.
5 (F) Religion. "Religion" with respect to employers
6includes all aspects of religious observance and practice, as
7well as belief, unless an employer demonstrates that he is
8unable to reasonably accommodate an employee's or prospective
9employee's religious observance or practice without undue
10hardship on the conduct of the employer's business.
11 (G) Public Employer. "Public employer" means the State, an
12agency or department thereof, unit of local government, school
13district, instrumentality or political subdivision.
14 (H) Public Employee. "Public employee" means an employee
15of the State, agency or department thereof, unit of local
16government, school district, instrumentality or political
17subdivision. "Public employee" does not include public
18officers or employees of the General Assembly or agencies
19thereof.
20 (I) Public Officer. "Public officer" means a person who is
21elected to office pursuant to the Constitution or a statute or
22ordinance, or who is appointed to an office which is
23established, and the qualifications and duties of which are
24prescribed, by the Constitution or a statute or ordinance, to
25discharge a public duty for the State, agency or department
26thereof, unit of local government, school district,

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1instrumentality or political subdivision.
2 (J) Eligible Bidder. "Eligible bidder" means a person who,
3prior to contract award or prior to bid opening for State
4contracts for construction or construction-related services,
5has filed with the Department a properly completed, sworn and
6currently valid employer report form, pursuant to the
7Department's regulations. The provisions of this Article
8relating to eligible bidders apply only to bids on contracts
9with the State and its departments, agencies, boards, and
10commissions, and the provisions do not apply to bids on
11contracts with units of local government or school districts.
12 (K) Citizenship Status. "Citizenship status" means the
13status 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"
23means the status of being a person born outside of the United
24States, and not a U.S. citizen, who is authorized by the
25federal government to work in the United States.
26(Source: P.A. 101-221, eff. 1-1-20; 101-430, eff. 7-1-20;

SB3865 Engrossed- 648 -LRB102 24242 RJF 33473 b
1102-233, eff. 8-2-21; 102-558, eff. 8-20-21.)
2 Section 200. The Resident Alien Course Act is amended by
3changing the title of the Act and Sections 0.01, 1, 2, and 3 as
4follows:
5 (815 ILCS 400/Act title)
6 An Act concerning fees charged for courses offered to
7persons seeking permanent resident noncitizen alien status
8under 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
11Resident 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.
15Immigration and Naturalization Service to offer a course
16leading to a certificate of satisfactory pursuit for issuance
17of permanent resident noncitizen alien status, may charge a
18fee for such course in excess of $5 per hour per individual up
19to the first 60 hours of instruction or $500 for up to 12
20months of instruction from the date of registration. As used
21in this Section, the term "fee" includes all costs associated
22with the course, including the costs of instruction and

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1materials.
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
5or course with the promise of preparing the recipient or
6enrollee for the English and civics exam of the U.S.
7Immigration and Naturalization Service for issuance of
8permanent resident noncitizen alien status may charge a fee
9for such service or course in excess of $5 per hour per
10individual up to the first 60 hours of instruction or $500 for
11up to 12 months of instruction from the date of registration.
12As used in this Section, the term "fee" includes all costs
13associated with the service or course, including the costs of
14instruction 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
18service described in Section 2 shall include within any
19literature or print or electronic advertisement for such
20service or course a statement that such service or course is
21designed to prepare the recipient or enrollee for the English
22and civics exam of the U.S. Immigration and Naturalization
23Service and that the individual or agency offering the service
24or course does not issue the certificate of satisfactory

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

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

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1immigration assistance service shall be subject to this
2Section.
3 (b) Any person who provides or offers to provide
4immigration assistance service may perform only the following
5services:
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
13is not an attorney or an accredited representative filling out
14immigration forms shall be limited to the maximum fees set
15forth in subsections (a) and (b) of Section 3-104 of the
16Illinois Notary Public Act (5 ILCS 312/3-104). The maximum fee
17schedule set forth in subsections (a) and (b) of Section 3-104
18of the Illinois Notary Public Act shall apply to any person
19that provides or offers to provide immigration assistance
20service performing the services described therein. The
21Attorney General may promulgate rules establishing maximum
22fees that may be charged for any services not described in that
23subsection. The maximum fees must be reasonable in light of
24the costs of providing those services and the degree of
25professional skill required to provide the services.
26 No person subject to this Act shall charge fees directly

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1or indirectly for referring an individual to an attorney or
2for any immigration matter not authorized by this Article,
3provided that a person may charge a fee for notarizing
4documents as permitted by the Illinois Notary Public Act.
5 (c) Any person performing such services shall register
6with the Illinois Attorney General and submit verification of
7malpractice insurance or of a surety bond.
8 (d) Except as provided otherwise in this subsection,
9before providing any assistance in an immigration matter a
10person shall provide the customer with a written contract that
11includes 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
21organization that provides advice or assistance in immigration
22matters to clients without charge beyond a reasonable fee to
23reimburse the organization's or clinic's reasonable costs
24relating to providing immigration services to that client.
25 (e) Any person who provides or offers immigration
26assistance service and is not exempted from this Section,

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1shall post signs at his or her place of business, setting forth
2information in English and in every other language in which
3the person provides or offers to provide immigration
4assistance service. Each language shall be on a separate sign.
5Signs shall be posted in a location where the signs will be
6visible to customers. Each sign shall be at least 11 inches by
717 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
22is not an attorney who advertises immigration assistance
23service in a language other than English, whether by radio,
24television, signs, pamphlets, newspapers, or other written
25communication, with the exception of a single desk plaque,
26shall include in the document, advertisement, stationery,

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1letterhead, business card, or other comparable written
2material the following notice in English and the language in
3which the written communication appears. This notice shall be
4of a conspicuous size, if in writing, and shall state: "I AM
5NOT AN ATTORNEY LICENSED TO PRACTICE LAW IN ILLINOIS AND MAY
6NOT GIVE LEGAL ADVICE OR ACCEPT FEES FOR LEGAL ADVICE.". If
7such advertisement is by radio or television, the statement
8may be modified but must include substantially the same
9message.
10 Any person who provides or offers immigration assistance
11service and is not exempted from this Section shall not, in any
12document, advertisement, stationery, letterhead, business
13card, or other comparable written material, literally
14translate from English into another language terms or titles
15including, but not limited to, notary public, notary,
16licensed, attorney, lawyer, or any other term that implies the
17person 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
20Section 3-103 of the Illinois Notary Public Act (5 ILCS
21312/3-103), violations of this subsection shall result in a
22fine of $1,000. Violations shall not preempt or preclude
23additional appropriate civil or criminal penalties.
24 (f) The written contract shall be in both English and in
25the language of the customer.
26 (g) A copy of the contract shall be provided to the

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1customer upon the customer's execution of the contract.
2 (h) A customer has the right to rescind a contract within
372 hours after his or her signing of the contract.
4 (i) Any documents identified in paragraph (3) of
5subsection (c) shall be returned upon demand of the customer.
6 (j) No person engaged in providing immigration services
7who is not exempted under this Section shall do any of the
8following:
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,
18or the rules and regulations issued under this Section, shall
19be guilty of a Class A misdemeanor for a first offense and a
20Class 3 felony for a second or subsequent offense committed
21within 5 years of a previous conviction for the same offense.
22 Upon his own information or upon the complaint of any
23person, the Attorney General or any State's Attorney, or a
24municipality with a population of more than 1,000,000, may
25maintain an action for injunctive relief and also seek a civil
26penalty not exceeding $50,000 in the circuit court against any

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1person who violates any provision of this Section. These
2remedies are in addition to, and not in substitution for,
3other available remedies.
4 If the Attorney General or any State's Attorney or a
5municipality with a population of more than 1,000,000 fails to
6bring an action as provided under this Section any person may
7file a civil action to enforce the provisions of this Article
8and maintain an action for injunctive relief, for compensatory
9damages to recover prohibited fees, or for such additional
10relief as may be appropriate to deter, prevent, or compensate
11for the violation. In order to deter violations of this
12Section, courts shall not require a showing of the traditional
13elements for equitable relief. A prevailing plaintiff may be
14awarded 3 times the prohibited fees or a minimum of $1,000 in
15punitive damages, attorney's fees, and costs of bringing an
16action under this Section. It is the express intention of the
17General Assembly that remedies for violation of this Section
18be cumulative.
19 (n) No unit of local government, including any home rule
20unit, shall have the authority to regulate immigration
21assistance services unless such regulations are at least as
22stringent as those contained in Public Act 87-1211. It is
23declared to be the law of this State, pursuant to paragraph (i)
24of Section 6 of Article VII of the Illinois Constitution of
251970, that Public Act 87-1211 is a limitation on the authority
26of a home rule unit to exercise powers concurrently with the

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1State. The limitations of this Section do not apply to a home
2rule unit that has, prior to January 1, 1993 (the effective
3date of Public Act 87-1211), adopted an ordinance regulating
4immigration assistance services.
5 (o) This Section is severable under Section 1.31 of the
6Statute on Statutes.
7 (p) The Attorney General shall issue rules not
8inconsistent with this Section for the implementation,
9administration, and enforcement of this Section. The rules may
10provide 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
19changing 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
22Act.
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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1incorporated village, school district, body politic, or
2municipal corporation therein.
3 2. Every person, firm, public or private corporation,
4including hospitals, public service, eleemosynary, religious
5or charitable corporations or associations who has any person
6in service or under any contract for hire, express or implied,
7oral or written, and who is engaged in any of the enterprises
8or businesses enumerated in Section 3 of this Act, or who at or
9prior to the time of the accident to the employee for which
10compensation under this Act may be claimed, has in the manner
11provided in this Act elected to become subject to the
12provisions of this Act, and who has not, prior to such
13accident, effected a withdrawal of such election in the manner
14provided in this Act.
15 3. Any one engaging in any business or enterprise referred
16to in subsections 1 and 2 of Section 3 of this Act who
17undertakes to do any work enumerated therein, is liable to pay
18compensation to his own immediate employees in accordance with
19the provisions of this Act, and in addition thereto if he
20directly or indirectly engages any contractor whether
21principal or sub-contractor to do any such work, he is liable
22to pay compensation to the employees of any such contractor or
23sub-contractor unless such contractor or sub-contractor has
24insured, in any company or association authorized under the
25laws of this State to insure the liability to pay compensation
26under this Act, or guaranteed his liability to pay such

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

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

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

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

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1have a cause of action by reason of any injury, disablement or
2death arising out of and in the course of his employment may
3elect to pursue his remedy in the State where injured or
4disabled, or in the State where the contract of hire is made,
5or in the State where the employment is principally localized.
6 However, any employer may elect to provide and pay
7compensation to any employee other than those engaged in the
8usual course of the trade, business, profession or occupation
9of the employer by complying with Sections 2 and 4 of this Act.
10Employees are not included within the provisions of this Act
11when excluded by the laws of the United States relating to
12liability of employers to their employees for personal
13injuries where such laws are held to be exclusive.
14 The term "employee" does not include persons performing
15services as real estate broker, broker-salesman, or salesman
16when such persons are paid by commission only.
17 (c) "Commission" means the Industrial Commission created
18by Section 5 of "The Civil Administrative Code of Illinois",
19approved March 7, 1917, as amended, or the Illinois Workers'
20Compensation Commission created by Section 13 of this Act.
21 (d) To obtain compensation under this Act, an employee
22bears the burden of showing, by a preponderance of the
23evidence, that he or she has sustained accidental injuries
24arising 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;
2697-813, 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
3an accidental injury to the employee resulting in death is:
4 (a) If the employee leaves surviving a widow, widower,
5child or children, the applicable weekly compensation rate
6computed in accordance with subparagraph 2 of paragraph (b) of
7Section 8, shall be payable during the life of the widow or
8widower and if any surviving child or children shall not be
9physically or mentally incapacitated then until the death of
10the widow or widower or until the youngest child shall reach
11the age of 18, whichever shall come later; provided that if
12such child or children shall be enrolled as a full time student
13in any accredited educational institution, the payments shall
14continue until such child has attained the age of 25. In the
15event any surviving child or children shall be physically or
16mentally incapacitated, the payments shall continue for the
17duration of such incapacity.
18 The term "child" means a child whom the deceased employee
19left surviving, including a posthumous child, a child legally
20adopted, a child whom the deceased employee was legally
21obligated to support or a child to whom the deceased employee
22stood in loco parentis. The term "children" means the plural
23of "child".
24 The term "physically or mentally incapacitated child or
25children" means a child or children incapable of engaging in

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

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1the 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
4child or children who are not entitled to compensation under
5the foregoing paragraph (a) but who at the time of the accident
6were nevertheless in any manner dependent upon the earnings of
7the employee, or leaves surviving a parent or parents who at
8the time of the accident were partially dependent upon the
9earnings of the employee, then there shall be paid to such
10dependent or dependents for a period of 8 years weekly
11compensation payments at such proportion of the applicable
12rate if the employee had left surviving a widow or widower as
13such dependency bears to total dependency. In the event of the
14death of any such beneficiary the share of such beneficiary
15shall be divided equally among the surviving beneficiaries and
16in the event of the death of the last such beneficiary all the
17rights 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
20any grandparent, grandparents, grandchild or grandchildren or
21collateral heirs dependent upon the employee's earnings to the
22extent of 50% or more of total dependency, then there shall be
23paid to such dependent or dependents for a period of 5 years
24weekly compensation payments at such proportion of the
25applicable rate if the employee had left surviving a widow or
26widower as such dependency bears to total dependency. In the

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

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

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1Section 8, paragraph (f), of this Act, and shall be paid out
2and disbursed as therein provided and shall not at any time be
3appropriated or diverted to any other use or purpose.
4 On January 15, 1991, the employer shall further pay a sum
5equal to one half of 1% of all compensation payments made by
6him from January 1, 1990 through June 30, 1990 either under
7this Act or under the Workers' Occupational Diseases Act,
8whether by lump sum settlement or weekly compensation
9payments, but not including hospital, surgical or
10rehabilitation payments, into an additional Special Fund which
11shall be designated as the "Rate Adjustment Fund". On March
1215, 1991, the employer shall pay into the Rate Adjustment Fund
13a sum equal to one half of 1% of all such compensation payments
14made from July 1, 1990 through December 31, 1990. Within 60
15days after July 15, 1991, the employer shall pay into the Rate
16Adjustment Fund a sum equal to one half of 1% of all such
17compensation payments made from January 1, 1991 through June
1830, 1991. Within 60 days after January 15 of 1992 and each
19subsequent year through 1996, the employer shall pay into the
20Rate Adjustment Fund a sum equal to one half of 1% of all such
21compensation payments made in the last 6 months of the
22preceding calendar year. Within 60 days after July 15 of 1992
23and each subsequent year through 1995, the employer shall pay
24into the Rate Adjustment Fund a sum equal to one half of 1% of
25all such compensation payments made in the first 6 months of
26the same calendar year. Within 60 days after January 15 of 1997

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1and each subsequent year through 2005, the employer shall pay
2into the Rate Adjustment Fund a sum equal to three-fourths of
31% of all such compensation payments made in the last 6 months
4of the preceding calendar year. Within 60 days after July 15 of
51996 and each subsequent year through 2004, the employer shall
6pay into the Rate Adjustment Fund a sum equal to three-fourths
7of 1% of all such compensation payments made in the first 6
8months of the same calendar year. Within 60 days after July 15
9of 2005, the employer shall pay into the Rate Adjustment Fund a
10sum equal to 1% of such compensation payments made in the first
116 months of the same calendar year. Within 60 days after
12January 15 of 2006 and each subsequent year, the employer
13shall pay into the Rate Adjustment Fund a sum equal to 1.25% of
14such compensation payments made in the last 6 months of the
15preceding calendar year. Within 60 days after July 15 of 2006
16and each subsequent year, the employer shall pay into the Rate
17Adjustment Fund a sum equal to 1.25% of such compensation
18payments made in the first 6 months of the same calendar year.
19The administrative costs of collecting assessments from
20employers for the Rate Adjustment Fund shall be paid from the
21Rate Adjustment Fund. The cost of an actuarial audit of the
22Fund shall be paid from the Rate Adjustment Fund. The State
23Treasurer is ex officio custodian of such Special Fund and the
24same shall be held and disbursed for the purposes hereinafter
25stated in paragraphs (f) and (g) of Section 8 upon the order of
26the Commission or of a competent court. The Rate Adjustment

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

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

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

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

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1in this Section to be paid in case accident results in death,
2shall be paid in installments equal to the percentage of the
3average earnings as provided for in Section 8, paragraph (b)
4of this Act, at the same intervals at which the wages or
5earnings of the employees were paid. If this is not feasible,
6then the installments shall be paid weekly. Such compensation
7may be paid in a lump sum upon petition as provided in Section
89 of this Act. However, in addition to the benefits provided by
9Section 9 of this Act where compensation for death is payable
10to the deceased's widow, widower or to the deceased's widow,
11widower and one or more children, and where a partial lump sum
12is applied for by such beneficiary or beneficiaries within 18
13months after the deceased's death, the Commission may, in its
14discretion, grant a partial lump sum of not to exceed 100 weeks
15of the compensation capitalized at their present value upon
16the basis of interest calculated at 3% per annum with annual
17rests, upon a showing that such partial lump sum is for the
18best interest of such beneficiary or beneficiaries.
19 (h) In case the injured employee is under 16 years of age
20at the time of the accident and is illegally employed, the
21amount 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
24of the Child Labor Law relating to the employment of minors
25under the age of 16 years.
26 However, where an employer has on file an employment

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1certificate issued pursuant to the Child Labor Law or work
2permit issued pursuant to the Federal Fair Labor Standards
3Act, as amended, or a birth certificate properly and duly
4issued, such certificate, permit or birth certificate is
5conclusive evidence as to the age of the injured minor
6employee for the purposes of this Section only.
7 (i) Whenever the dependents of a deceased employee are
8noncitizens aliens not residing in the United States, Mexico
9or Canada, the amount of compensation payable is limited to
10the beneficiaries described in paragraphs (a), (b) and (c) of
11this Section and is 50% of the compensation provided in
12paragraphs (a), (b) and (c) of this Section, except as
13otherwise provided by treaty.
14 In a case where any of the persons who would be entitled to
15compensation is living at any place outside of the United
16States, then payment shall be made to the personal
17representative of the deceased employee. The distribution by
18such personal representative to the persons entitled shall be
19made to such persons and in such manner as the Commission
20orders.
21(Source: P.A. 93-721, eff. 1-1-05; 94-277, eff. 7-20-05;
2294-695, eff. 11-16-05.)
23 Section 215. The Workers' Occupational Diseases Act is
24amended 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
5construed 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
8construed 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
25Commission created by the Workers' Compensation Act, approved
26July 9, 1951, as amended.

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1 (d) In this Act the term "Occupational Disease" means a
2disease arising out of and in the course of the employment or
3which has become aggravated and rendered disabling as a result
4of the exposure of the employment. Such aggravation shall
5arise out of a risk peculiar to or increased by the employment
6and not common to the general public.
7 A disease shall be deemed to arise out of the employment if
8there is apparent to the rational mind, upon consideration of
9all the circumstances, a causal connection between the
10conditions under which the work is performed and the
11occupational disease. The disease need not to have been
12foreseen or expected but after its contraction it must appear
13to have had its origin or aggravation in a risk connected with
14the employment and to have flowed from that source as a
15rational consequence.
16 An employee shall be conclusively deemed to have been
17exposed to the hazards of an occupational disease when, for
18any length of time however short, he or she is employed in an
19occupation or process in which the hazard of the disease
20exists; provided however, that in a claim of exposure to
21atomic radiation, the fact of such exposure must be verified
22by the records of the central registry of radiation exposure
23maintained by the Department of Public Health or by some other
24recognized governmental agency maintaining records of such
25exposures whenever and to the extent that the records are on
26file 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
2from the administration of a vaccine, including without
3limitation smallpox vaccine, to prepare for, or as a response
4to, a threatened or potential bioterrorist incident to the
5employee as part of a voluntary inoculation program in
6connection with the person's employment or in connection with
7any governmental program or recommendation for the inoculation
8of workers in the employee's occupation, geographical area, or
9other category that includes the employee is deemed to arise
10out of and in the course of the employment for all purposes
11under this Act. This paragraph added by Public Act 93-829 is
12declarative of existing law and is not a new enactment.
13 The employer liable for the compensation in this Act
14provided shall be the employer in whose employment the
15employee was last exposed to the hazard of the occupational
16disease claimed upon regardless of the length of time of such
17last exposure, except, in cases of silicosis or asbestosis,
18the only employer liable shall be the last employer in whose
19employment the employee was last exposed during a period of 60
20days or more after the effective date of this Act, to the
21hazard of such occupational disease, and, in such cases, an
22exposure during a period of less than 60 days, after the
23effective date of this Act, shall not be deemed a last
24exposure. If a miner who is suffering or suffered from
25pneumoconiosis was employed for 10 years or more in one or more
26coal mines there shall, effective July 1, 1973 be a rebuttable

SB3865 Engrossed- 687 -LRB102 24242 RJF 33473 b
1presumption that his or her pneumoconiosis arose out of such
2employment.
3 If a deceased miner was employed for 10 years or more in
4one or more coal mines and died from a respirable disease there
5shall, effective July 1, 1973, be a rebuttable presumption
6that his or her death was due to pneumoconiosis.
7 Any condition or impairment of health of an employee
8employed as a firefighter, emergency medical technician (EMT),
9emergency medical technician-intermediate (EMT-I), advanced
10emergency medical technician (A-EMT), or paramedic which
11results directly or indirectly from any bloodborne pathogen,
12lung or respiratory disease or condition, heart or vascular
13disease or condition, hypertension, tuberculosis, or cancer
14resulting in any disability (temporary, permanent, total, or
15partial) to the employee shall be rebuttably presumed to arise
16out of and in the course of the employee's firefighting, EMT,
17EMT-I, A-EMT, or paramedic employment and, further, shall be
18rebuttably presumed to be causally connected to the hazards or
19exposures of the employment. This presumption shall also apply
20to any hernia or hearing loss suffered by an employee employed
21as a firefighter, EMT, EMT-I, A-EMT, or paramedic. However,
22this presumption shall not apply to any employee who has been
23employed as a firefighter, EMT, EMT-I, A-EMT, or paramedic for
24less than 5 years at the time he or she files an Application
25for Adjustment of Claim concerning this condition or
26impairment with the Illinois Workers' Compensation Commission.

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

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

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1 (2) The term "COVID-19 first responder or front-line
2worker" means: all individuals employed as police, fire
3personnel, emergency medical technicians, or paramedics; all
4individuals employed and considered as first responders; all
5workers for health care providers, including nursing homes and
6rehabilitation facilities and home care workers; corrections
7officers; and any individuals employed by essential businesses
8and operations as defined in Executive Order 2020-10 dated
9March 20, 2020, as long as individuals employed by essential
10businesses and operations are required by their employment to
11encounter members of the general public or to work in
12employment locations of more than 15 employees. For purposes
13of this subsection only, an employee's home or place of
14residence is not a place of employment, except for home care
15workers.
16 (3) The presumption created in this subsection may be
17rebutted by evidence, including, but not limited to, the
18following:
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

SB3865 Engrossed- 691 -LRB102 24242 RJF 33473 b
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

SB3865 Engrossed- 692 -LRB102 24242 RJF 33473 b
1applies to all cases tried after June 5, 2020 (the effective
2date of Public Act 101-633) and in which the diagnosis of
3COVID-19 was made on or after March 9, 2020 and on or before
4June 30, 2021 (including the period between December 31, 2020
5and the effective date of this amendatory Act of the 101st
6General Assembly).
7 (5) Under no circumstances shall any COVID-19 case
8increase or affect any employer's workers' compensation
9insurance experience rating or modification, but COVID-19
10costs may be included in determining overall State loss costs.
11 (6) In order for the presumption created in this
12subsection to apply at trial, for COVID-19 diagnoses occurring
13on or before June 15, 2020, an employee must provide a
14confirmed medical diagnosis by a licensed medical practitioner
15or a positive laboratory test for COVID-19 or for COVID-19
16antibodies; for COVID-19 diagnoses occurring after June 15,
172020, an employee must provide a positive laboratory test for
18COVID-19 or for COVID-19 antibodies.
19 (7) The presumption created in this subsection does not
20apply if the employee's place of employment was solely the
21employee's home or residence for a period of 14 or more
22consecutive days immediately prior to the employee's injury,
23occupational disease, or period of incapacity resulted from
24exposure to COVID-19.
25 (8) The date of injury or the beginning of the employee's
26occupational disease or period of disability is either the

SB3865 Engrossed- 693 -LRB102 24242 RJF 33473 b
1date that the employee was unable to work due to contraction of
2COVID-19 or was unable to work due to symptoms that were later
3diagnosed as COVID-19, whichever came first.
4 (9) An employee who contracts COVID-19, but fails to
5establish the rebuttable presumption is not precluded from
6filing for compensation under this Act or under the Workers'
7Compensation Act.
8 (10) To qualify for temporary total disability benefits
9under the presumption created in this subsection, the employee
10must be certified for or recertified for temporary disability.
11 (11) An employer is entitled to a credit against any
12liability for temporary total disability due to an employee as
13a result of the employee contracting COVID-19 for (A) any sick
14leave benefits or extended salary benefits paid to the
15employee by the employer under Emergency Family Medical Leave
16Expansion Act, Emergency Paid Sick Leave Act of the Families
17First Coronavirus Response Act, or any other federal law, or
18(B) any other credit to which an employer is entitled under the
19Workers' 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
22changing 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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1Act, the term "employment" shall include service performed
2after December 31, 1977, by an individual in agricultural
3labor 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.

SB3865 Engrossed- 695 -LRB102 24242 RJF 33473 b
1 B. For the purposes of this Section, any individual who is
2a member of a crew furnished by a crew leader to perform
3service in agricultural labor for any other employing unit
4shall be treated as performing service in the employ of such
5crew leader if (1) the leader holds a valid certificate of
6registration under the Farm Labor Contractor Registration Act
7of 1963, or substantially all the members of such crew operate
8or maintain tractors, mechanized harvesting or crop dusting
9equipment, or any other mechanized equipment, which is
10provided by the crew leader; and (2) the service of such
11individual is not in employment for such other employing unit
12within the meaning of subsections A and C of Section 212, and
13of Section 213.
14 C. For the purposes of this Section, any individual who is
15furnished by a crew leader to perform service in agricultural
16labor for any other employing unit, and who is not treated as
17performing service in the employ of such crew leader under
18subsection B, shall be treated as performing service in the
19employ of such other employing unit, and such employing unit
20shall be treated as having paid cash wages to such individual
21in an amount equal to the amount of cash wages paid to the
22individual by the crew leader (either on his own behalf or on
23behalf of such other employing unit) for the service in
24agricultural labor performed for such other employing unit.
25 D. For the purposes of this Section, the term "crew
26leader" means an individual who (1) furnishes individuals to

SB3865 Engrossed- 696 -LRB102 24242 RJF 33473 b
1perform service in agricultural labor for any other employing
2unit; (2) pays (either on his own behalf or on behalf of such
3other employing unit) the individuals so furnished by him for
4the service in agricultural labor performed by them; and (3)
5has not entered into a written agreement with such other
6employing unit under which an individual so furnished by him
7is designated as performing services in the employ of such
8other 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.
12A noncitizen An alien shall be ineligible for benefits for any
13week which begins after December 31, 1977, on the basis of
14wages for services performed by such noncitizen alien, unless
15the noncitizen alien was an individual who was lawfully
16admitted for permanent residence at the time such services
17were performed or otherwise was permanently residing in the
18United States under color of law at the time such services were
19performed (including a person an alien who was lawfully
20present in the United States as a result of the application of
21the provisions of Section 212(d) (5) of the Immigration and
22Nationality Act); provided, that any modifications of the
23provisions of Section 3304(a) (14) of the Federal Unemployment
24Tax Act which
25 A. Specify other conditions or another effective date

SB3865 Engrossed- 697 -LRB102 24242 RJF 33473 b
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
10benefits for the purpose of determining whether benefits are
11not payable to them pursuant to this Section shall be
12uniformly required of all individuals who claim benefits.
13 If an individual would otherwise be eligible for benefits,
14no determination shall be made that such individual is
15ineligible for benefits pursuant to this Section because of
16the individual's noncitizen alien status, except upon a
17preponderance of the evidence.
18(Source: P.A. 86-3; 87-122.)
19 Section 995. No acceleration or delay. Where this Act
20makes changes in a statute that is represented in this Act by
21text that is not yet or no longer in effect (for example, a
22Section represented by multiple versions), the use of that
23text does not accelerate or delay the taking effect of (i) the
24changes made by this Act or (ii) provisions derived from any
25other Public Act.

SB3865 Engrossed- 698 -LRB102 24242 RJF 33473 b
1 Section 999. Effective date. This Act takes effect upon
2becoming law.

SB3865 Engrossed- 699 -LRB102 24242 RJF 33473 b
1 INDEX
2 Statutes amended in order of appearance
3 5 ILCS 312/2-102from Ch. 102, par. 202-102
4 5 ILCS 805/10
5 20 ILCS 605/605-800was 20 ILCS 605/46.19a in part
6 20 ILCS 1510/25
7 35 ILCS 5/1501from Ch. 120, par. 15-1501
8 45 ILCS 160/5
9 45 ILCS 162/10
10 55 ILCS 5/3-12007from Ch. 34, par. 3-12007
11 65 ILCS 5/11-74.2-14from Ch. 24, par. 11-74.2-14
12 70 ILCS 2605/11.15from Ch. 42, par. 331.15
13 110 ILCS 205/9.16from Ch. 144, par. 189.16
14 110 ILCS 925/3.06from Ch. 144, par. 1503.06
15 110 ILCS 930/2from Ch. 144, par. 2302
16 110 ILCS 930/7from Ch. 144, par. 2307
17 110 ILCS 947/65.50
18 110 ILCS 947/65.110
19 110 ILCS 952/20
20 110 ILCS 975/5from Ch. 144, par. 2755
21 110 ILCS 975/6.5
22 205 ILCS 635/1-4
23 215 ILCS 5/2from Ch. 73, par. 614
24 215 ILCS 5/35A-5
25 215 ILCS 5/37from Ch. 73, par. 649

SB3865 Engrossed- 700 -LRB102 24242 RJF 33473 b
1 215 ILCS 5/58from Ch. 73, par. 670
2 215 ILCS 5/Art. III.5
3 heading
4 215 ILCS 5/60afrom Ch. 73, par. 672a
5 215 ILCS 5/60bfrom Ch. 73, par. 672b
6 215 ILCS 5/60cfrom Ch. 73, par. 672c
7 215 ILCS 5/60dfrom Ch. 73, par. 672d
8 215 ILCS 5/60efrom Ch. 73, par. 672e
9 215 ILCS 5/60ffrom Ch. 73, par. 672f
10 215 ILCS 5/60gfrom Ch. 73, par. 672g
11 215 ILCS 5/60hfrom Ch. 73, par. 672h
12 215 ILCS 5/60ifrom Ch. 73, par. 672i
13 215 ILCS 5/60jfrom Ch. 73, par. 672j
14 215 ILCS 5/63from Ch. 73, par. 675
15 215 ILCS 5/86from Ch. 73, par. 698
16 215 ILCS 5/87from Ch. 73, par. 699
17 215 ILCS 5/88from Ch. 73, par. 700
18 215 ILCS 5/103from Ch. 73, par. 715
19 215 ILCS 5/104from Ch. 73, par. 716
20 215 ILCS 5/105from Ch. 73, par. 717
21 215 ILCS 5/Art. VI heading
22 215 ILCS 5/108from Ch. 73, par. 720
23 215 ILCS 5/109from Ch. 73, par. 721
24 215 ILCS 5/110from Ch. 73, par. 722
25 215 ILCS 5/111from Ch. 73, par. 723
26 215 ILCS 5/112from Ch. 73, par. 724

SB3865 Engrossed- 701 -LRB102 24242 RJF 33473 b
1 215 ILCS 5/113from Ch. 73, par. 725
2 215 ILCS 5/113.1from Ch. 73, par. 725.1
3 215 ILCS 5/114from Ch. 73, par. 726
4 215 ILCS 5/115from Ch. 73, par. 727
5 215 ILCS 5/116from Ch. 73, par. 728
6 215 ILCS 5/117from Ch. 73, par. 729
7 215 ILCS 5/118from Ch. 73, par. 730
8 215 ILCS 5/119from Ch. 73, par. 731
9 215 ILCS 5/120from Ch. 73, par. 732
10 215 ILCS 5/123from Ch. 73, par. 735
11 215 ILCS 5/123.1from Ch. 73, par. 735.1
12 215 ILCS 5/123.3from Ch. 73, par. 735.3
13 215 ILCS 5/123C-8from 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 5/131.13from Ch. 73, par. 743.13
18 215 ILCS 5/132.3from Ch. 73, par. 744.3
19 215 ILCS 5/133from Ch. 73, par. 745
20 215 ILCS 5/136from Ch. 73, par. 748
21 215 ILCS 5/141afrom Ch. 73, par. 753a
22 215 ILCS 5/144from Ch. 73, par. 756
23 215 ILCS 5/144.1from Ch. 73, par. 756.1
24 215 ILCS 5/146from Ch. 73, par. 758
25 215 ILCS 5/148from Ch. 73, par. 760
26 215 ILCS 5/154.5from Ch. 73, par. 766.5

SB3865 Engrossed- 702 -LRB102 24242 RJF 33473 b
1 215 ILCS 5/156from Ch. 73, par. 768
2 215 ILCS 5/156.1from Ch. 73, par. 768.1
3 215 ILCS 5/157from Ch. 73, par. 769
4 215 ILCS 5/161from Ch. 73, par. 773
5 215 ILCS 5/162from Ch. 73, par. 774
6 215 ILCS 5/163from Ch. 73, par. 775
7 215 ILCS 5/164from Ch. 73, par. 776
8 215 ILCS 5/166from Ch. 73, par. 778
9 215 ILCS 5/169from Ch. 73, par. 781
10 215 ILCS 5/170from Ch. 73, par. 782
11 215 ILCS 5/173.1from 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 5/180from Ch. 73, par. 792
17 215 ILCS 5/185.1from Ch. 73, par. 797.1
18 215 ILCS 5/188from Ch. 73, par. 800
19 215 ILCS 5/188.1from Ch. 73, par. 800.1
20 215 ILCS 5/197from Ch. 73, par. 809
21 215 ILCS 5/201from Ch. 73, par. 813
22 215 ILCS 5/223from Ch. 73, par. 835
23 215 ILCS 5/241from Ch. 73, par. 853
24 215 ILCS 5/292.1from Ch. 73, par. 904.1
25 215 ILCS 5/302.1from Ch. 73, par. 914.1
26 215 ILCS 5/308.1from Ch. 73, par. 920.1

SB3865 Engrossed- 703 -LRB102 24242 RJF 33473 b
1 215 ILCS 5/309.1from Ch. 73, par. 921.1
2 215 ILCS 5/310.1from Ch. 73, par. 922.1
3 215 ILCS 5/357.29from Ch. 73, par. 969.29
4 215 ILCS 5/370from Ch. 73, par. 982
5 215 ILCS 5/404from Ch. 73, par. 1016
6 215 ILCS 5/408from Ch. 73, par. 1020
7 215 ILCS 5/412from Ch. 73, par. 1024
8 215 ILCS 5/413from Ch. 73, par. 1025
9 215 ILCS 5/415from Ch. 73, par. 1027
10 215 ILCS 5/444from Ch. 73, par. 1056
11 215 ILCS 5/444.1from Ch. 73, par. 1056.1
12 215 ILCS 5/445from Ch. 73, par. 1057
13 215 ILCS 5/448from Ch. 73, par. 1060
14 215 ILCS 5/451from Ch. 73, par. 1063
15 215 ILCS 5/531.09from Ch. 73, par. 1065.80-9
16 215 ILCS 5/531.11from Ch. 73, par. 1065.80-11
17 215 ILCS 5/534.5from Ch. 73, par. 1065.84-5
18 215 ILCS 5/543.1from Ch. 73, par. 1065.93-1
19 215 ILCS 5/1103from Ch. 73, par. 1065.803
20 215 ILCS 100/5from Ch. 73, par. 1605
21 215 ILCS 105/7from Ch. 73, par. 1307
22 215 ILCS 150/15from Ch. 148, par. 215
23 215 ILCS 155/11from 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 50/8from Ch. 111, par. 7408
2 225 ILCS 459/10
3 305 ILCS 5/5-3from Ch. 23, par. 5-3
4 310 ILCS 20/5from Ch. 67 1/2, par. 57
5 315 ILCS 30/18from Ch. 67 1/2, par. 91.118
6 330 ILCS 61/1-10
7 430 ILCS 65/4from Ch. 38, par. 83-4
8 430 ILCS 65/8from 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 5/3-2-2from Ch. 38, par. 1003-2-2
13 730 ILCS 5/5-5-3
14 740 ILCS 80/12from Ch. 59, par. 12
15 750 ILCS 28/20
16 765 ILCS 60/Act title
17 765 ILCS 60/0.01from Ch. 6, par. 0.01
18 765 ILCS 60/7from Ch. 6, par. 7
19 765 ILCS 60/8from Ch. 6, par. 8
20 765 ILCS 725/Act title
21 765 ILCS 725/0.01from Ch. 6, par. 8.9
22 765 ILCS 725/1from Ch. 6, par. 9
23 775 ILCS 5/2-101
24 815 ILCS 400/Act title
25 815 ILCS 400/0.01from Ch. 111, par. 8050
26 815 ILCS 400/1from Ch. 111, par. 8051

SB3865 Engrossed- 705 -LRB102 24242 RJF 33473 b